TOLEDO, Ohio — Libbey Inc. announced announced early Monday the company has filed for Chapter 11 of the Bankruptcy Code.
According to a press release, Libbey expects to use the court-supervised restructuring process to strengthen its balance sheet to navigate the effects of the COVID-19 pandemic.
Libbey says it is talking with lenders and stakeholders regarding the terms of a consensual financial restructuring plan.
Part of the press release reads below, saying lenders have already agreed to provide $160 million in credit and loans to help their recovery:
"Certain of Libbey's existing lenders have agreed to provide up to $160 million in debtor-in-possession ("DIP") financing, including a $100 million revolving credit facility and a $60 million term loan. Following court approval, the Company expects this financing, together with cash flow from operations, to support the business during the court-supervised process. The Company is continuing to serve customers and end users globally, and will continue to evaluate the operating environment and make adjustments, as necessary, to adapt to the impact of COVID-19."
Libbey is filing customary first day motions that will allow the company to smoothly transition its business into Chapter 11, including, among other things, granting authority to pay employee wages and benefits and honor customer commitments in the ordinary course of business.
The glassware company will also pay vendors in the ordinary course for all goods and services provided on or after the Chapter 11 filing date.
"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 in Libbey's more than 200-year history," said Mike Bauer, chief executive officer of Libbey. "As a result, entering this process is a necessary step to address our liquidity, strengthen our balance sheet and better position Libbey for the future.
He continued, "We are already seeing some improvement in our end markets with the gradual lifting of stay-at-home restrictions, and during the past few weeks have reopened our U.S. distribution centers and restarted several production lines in Toledo, Ohio and Shreveport, Louisiana. I want to thank all of our employees for their continued dedication and tireless efforts, especially during the unprecedented uncertainty we are collectively facing due to COVID-19. I also would like to thank our lenders for their continued support and look forward to working with them and all our stakeholders as we move forward."
Libbey's international subsidiaries in Canada, China, Mexico, the Netherlands and Portugal are not included in the Chapter 11 proceedings, according to the press release.