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Web Date: September 18, 2017

Alpek cutting off M&G over unpaid bills

Alpek also doubts M&G will complete a major new plant
Department: Business

The Mexican chemical company Alpek says it is cutting off raw material supply to the polyethylene terephthalate (PET) resin maker Mossi & Ghisolfi because of a nearly $50 million bill it is owed.

Alpek says a $49 million debt from M&G is past due. In response, Alpek is halting deliveries of the main PET raw material, purified terephthalic acid (PTA), to M&G’s sites in Altamira, Mexico, and Suape, Brazil.

Alpek also cast doubts about M&G’s ability to complete a massive new PET and PTA plant in Corpus Christi, Texas. That plant is to have more than 1 million metric tons of PET and 1.2 million metric tons of PTA capacity per year.

Alpek, which is also a major PET producer, has a contract for 500,000 metric tons of PET supply per year from the Corpus Christi plant when it is completed. “Alpek anticipates difficulties for M&G to conclude the project,” it said in a statement.

M&G says it is reviewing Alpek’s assertions. “The company is in active dialogue with its key stakeholders regarding its near term needs,” an M&G spokesperson said in a statement.

The M&G project has run into delays. In April, M&G disclosed that a contractor, Integrity Mechanical Specialists (IMS), walked off the job because of $50 million it says it was owed.

IMS filed a lien for $53 million against M&G with the Nueces, Texas, county clerk. C&EN attempted to reach IMS officials, but the company’s phone number has apparently been disconnected.

Other companies have filed liens as well. One of these firms, WFS Construction, has about $25 million liens it filed against M&G.

M&G hired a new contractor, Bay Ltd., to take IMS’s place. In April, M&G said it expected to complete the project by the middle of this year.

 
Chemical & Engineering News
ISSN 0009-2347
Copyright © American Chemical Society
Comments
Richard Allen (Tue Sep 26 11:19:35 EDT 2017)
M&G was going to complete this project "JUMBO" at all costs, and it has cost all of the employees and their families. I work or worked at M&G Polymers in Apple Grove, West Virginia. This is people's lives! Please say a prayer for everyone affected by M&G poor management.
John Chaparro (Sun Oct 08 22:02:07 EDT 2017)
Richard

Reports in the Italian press say that M&G has hired restructuring advisors and is trying to find a white knight investor. It also reports that they will be putting their US international operations, including Corpus Christ, into Chapter 11. Il Messaggero - 10/4/2017, cited by MergerMarket - Intelligence ID:
2513145

The question many have is why would M&G sign up to finance 75% of the $1B Corpus project with a $435 million subordinated lien on the plant from Alpek, a global competitor, and a first lien $390 miloion loan from Alpek's long time Mexican lender - Banco Imbursa. Alpek thus held the ultimate control over the destiny of the project through its power to cut off all of M&G's PTA supplies if M&G ever got into trouble. Alpek stands to get the plant via bankruptcy -- A deal made with the devil. Pretty Cuurious

I believe all M&G's North American plants will have new owners when the dust settles.
Richard Allen (Wed Oct 11 06:49:24 EDT 2017)
John, any additional information is appreciated. My email is rallen101363@gmail.com

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