M&G seeking arrangement with creditors | October 30, 2017 Issue - Vol. 95 Issue 43 | Chemical & Engineering News
Volume 95 Issue 43 | p. 9 | News of The Week
Issue Date: October 30, 2017 | Web Date: October 26, 2017

M&G seeking arrangement with creditors

Polyester competitor Alpek may be key to a financial settlement
Department: Business
Keywords: Polymers, Alpek, M&G, polyester

In Mossi Ghisolfi’s deepening financial crisis, M & G Polymers USA, the U.S. affiliate of the Italian polyethylene terephthalate (PET) maker, has filed for Chapter 11 bankruptcy protection in Delaware.

According to its filing, the company has up to $500 million in liabilities.

Last month, Mexican chemical firm Alpek, a PET rival and also an important supplier of the polyester raw material purified terephthalic acid (PTA) to M&G, cut off supplies of PTA to M&G because of $50 million in unpaid invoices. According to the bankruptcy filing, M&G also owes rival and supplier Indorama $57 million.

M&G has also been struggling to pay contractors building a new PTA/PET complex in Corpus Christi, Texas. That plant is designed to produce up to 1.2 million metric tons of PTA and 1 million metric tons of PET per year.

Contractors have filed for about $100 million in liens against the plant. One contractor, Fluor Enterprises, laid off 274 workers who were building the facility.

Earlier this month, M&G affiliates filed with a tribunal in its home country of Italy for an arrangement with creditors.

In reference to that filing, M&G said its affiliates are “studying a proposal for an arrangement that will allow their overall activities to continue as a going concern.”

Such an arrangement may involve Alpek. The company wrote down $113 million in accounts receivable from M&G and has taken a charge of $435 million for asset impairments.

Alpek says M&G has shut down its plant in Mexico, which receives supply from an Alpek plant nearby. In addition, Alpek has acquired rights to a $100 million loan secured by M&G’s Mexican plant.

“Alpek will continue engaging M&G and its creditors to resume M&G Mexico’s operations and implement a restructuring plan for M&G Mexico,” says Alpek CEO José de Jesús Valdez Simancas.

 
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