Libbey Inc., the 200-year-old U.S. glassware maker, filed for bankruptcy Monday after the covid-19 pandemic intensified a burdensome debt load and strained its access to cash.
The company filed for Chapter 11 protection from creditors after the virus and related state-imposed lockdowns gutted demand for its tumblers, mugs and bowls among key food-service customers like restaurants and bars. Libbey had been reviewing its debt pile before the outbreak, and had already tried and failed to refinance its term loans, according to court papers.
Libbey listed assets of as much as $500 million and liabilities of at least that amount in its Delaware bankruptcy petition. The company reported about $400 million of long-term debt in its annual report released in February. Its international business entities aren't included in the Chapter 11 filing.
Libbey is negotiating with its lenders and plans to quickly cut a deal to shed debt, court papers show. The company has commitments for some $160 million of bankruptcy financing, the terms of which call for court approval of a Chapter 11 exit strategy in about 100 days.
Publicly traded Libbey traces its roots to the New England Glass Co., founded in 1818 in East Cambridge, Mass. The company moved to Toledo in 1888. It operates two glass manufacturing plants in the U.S. and several overseas.
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Libbey has more than 5,500 employees around the world. It temporarily cut worker salaries by as much as 25% during the pandemic and laid off almost all of its hourly U.S. workforce in March. Its board of directors voted to pay some $2.35 million in retention bonuses to management before the bankruptcy filing.
"While we entered 2020 with positive momentum from our strong finish in 2019, the dramatic and prolonged impact of covid-19 on the demand for our products and on our business is truly unprecedented," Chief Executive Officer Mike Bauer said in a statement, adding that the bankruptcy is "a necessary step to address our liquidity, strengthen our balance sheet and better position Libbey for the future."
The case is Libbey Glass Inc., 20-11439, U.S. Bankruptcy Court for the District of Delaware.
Business on 06/03/2020