The financial woes for Mossi & Ghisolfi are deepening.
Affiliates of the polyethylene terephthalate (PET) maker have filed with a tribunal in its home country of Italy for an arrangement with creditors, in accordance with Italian bankruptcy law.
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 over $50 million in unpaid invoices.
M&G has also been struggling to pay contractors building a massive new PTA/PET complex in Corpus Christi, Texas. That plant is designed to have a capacity to produce 1 million metric tons of PET and 1.2 million metric tons of PTA 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.
Alpek has an offtake agreement to buy 500,000 metric tons per year of PET from the plant once it is completed.
M&G says 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 the 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 Chief Executive Officer José de Jesús Valdez.