LA SEDA
Spanish PET producer declares voluntary insolvency / Plans for debt restructuring fail / Business continues
Spanish PET producer La Seda de Barcelona (LSB, Barcelona; www.laseda.es) has taken the next steps to stem further red ink from overflowing and has filed for voluntary insolvency in a Barcelona commercial court. The measure comes after the company and its creditors failed to reach a consensus for restructuring the troubled entity as well as its inability to find a new industrial shareholder to increase its equity – see Plasteurope.com from 04.06.2013.
Voluntary insolvency simply means that the company realises it cannot meet the obligations to its creditors nor does it have a solution to resolve its current financial situation. With its filing of voluntary insolvency, the company has another chance to negotiate with its creditors. It has been reported that the company carried a debt load of EUR 600m at the end of 2012.
Thus, the current status for the troubled company is that despite having declared itself insolvent, this will cause no interruption to the "continuity of business activity" according to a media statement from LSB. The situation at the Catalan entity proves the old adage once again that it is not over until it is over.
In May, LSB said it had obtained an extension to its standstill loan until the end of June. However, its shareholders, including the US hedge fund group Anchorage Capital (www.anchoragecap.com) – now believed to the hold the largest stake at 37% – and the other primary shareholder Dutch BA PET (Amsterdam) could not agree to a debt restructuring plan.
To proceed with the refinancing, LSB needed to have the approval of 75% of its shareholders. As a stop-gap measure to stem the bleeding, La Seda recently announced plans to shut down its unprofitable 80,000 t/y polymerisation plant operated by Artenius Hellas in Volos / Greece – see Plasteurope.com of 30.05.2012.
LSB had pursued an aggressive expansion course for many years, building new PET capacity across Europe and buying up assets that competitors exiting the market had put up for sale. The drive ran out of steam as it was upstaged on world markets by rapidly expanding Asian competitors such as Indonesia’s Indorama Ventures (IVL, Bangkok / Thailand; www.indoramaventures.com) and the European PET market turned sour on oversupply and poor weather. Then there is the matter of the very sickly Spanish economy and the deep recession it has been caught in with more than 2,500 companies filing for insolvency at the beginning of 2013.
In 2012, the company reported sales flat at EUR 1.17 bn, with operating losses totalling EUR 68.8m, up from EUR 10.6m in 2011. The net consolidated loss widened to EUR 133.7m from EUR 49.6m, as EBITDA was halved from EUR 48m to EUR 24.8m. Yet, the packaging division lifted EBITDA to EUR 49.6m from EUR 43.8m.
La Seda has production facilities in Europe, Turkey and North Africa. According to Plasteurope.com's database, Polyglobe (www.polyglobe.net), LSB has 4 PET production sites with a total installed capacity of 590,000 t/y. Thus, the anticipated closing of the Greek site reduces the overall capacity by 80,000 t/y – see Plasteurope.com from 30.05.2013.
Voluntary insolvency simply means that the company realises it cannot meet the obligations to its creditors nor does it have a solution to resolve its current financial situation. With its filing of voluntary insolvency, the company has another chance to negotiate with its creditors. It has been reported that the company carried a debt load of EUR 600m at the end of 2012.
Thus, the current status for the troubled company is that despite having declared itself insolvent, this will cause no interruption to the "continuity of business activity" according to a media statement from LSB. The situation at the Catalan entity proves the old adage once again that it is not over until it is over.
In May, LSB said it had obtained an extension to its standstill loan until the end of June. However, its shareholders, including the US hedge fund group Anchorage Capital (www.anchoragecap.com) – now believed to the hold the largest stake at 37% – and the other primary shareholder Dutch BA PET (Amsterdam) could not agree to a debt restructuring plan.
To proceed with the refinancing, LSB needed to have the approval of 75% of its shareholders. As a stop-gap measure to stem the bleeding, La Seda recently announced plans to shut down its unprofitable 80,000 t/y polymerisation plant operated by Artenius Hellas in Volos / Greece – see Plasteurope.com of 30.05.2012.
LSB had pursued an aggressive expansion course for many years, building new PET capacity across Europe and buying up assets that competitors exiting the market had put up for sale. The drive ran out of steam as it was upstaged on world markets by rapidly expanding Asian competitors such as Indonesia’s Indorama Ventures (IVL, Bangkok / Thailand; www.indoramaventures.com) and the European PET market turned sour on oversupply and poor weather. Then there is the matter of the very sickly Spanish economy and the deep recession it has been caught in with more than 2,500 companies filing for insolvency at the beginning of 2013.
In 2012, the company reported sales flat at EUR 1.17 bn, with operating losses totalling EUR 68.8m, up from EUR 10.6m in 2011. The net consolidated loss widened to EUR 133.7m from EUR 49.6m, as EBITDA was halved from EUR 48m to EUR 24.8m. Yet, the packaging division lifted EBITDA to EUR 49.6m from EUR 43.8m.
La Seda has production facilities in Europe, Turkey and North Africa. According to Plasteurope.com's database, Polyglobe (www.polyglobe.net), LSB has 4 PET production sites with a total installed capacity of 590,000 t/y. Thus, the anticipated closing of the Greek site reduces the overall capacity by 80,000 t/y – see Plasteurope.com from 30.05.2013.
20.06.2013 Plasteurope.com [225645-0]
Published on 20.06.2013
German version of this article...