Issue Date: October 30, 2017 | Web Date: October 26, 2017
M&G seeking arrangement with creditors
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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