Libbey, a glass tableware manufacturer, and its U.S.-based subsidiaries filed voluntary petitions for a court-supervised reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Libbey’s international subsidiaries in Canada, China, Mexico, the Netherlands and Portugal are not included in the Chapter 11 proceedings and are operating in the normal course of business.
Alvarez & Marsal is serving as restructuring advisor, Lazard is serving as financial advisor and Latham & Watkins is serving as legal advisor to Libbey.
Libbey expects to use the court-supervised restructuring process to strengthen its balance sheet to navigate the effects of the COVID-19 pandemic and better position the company for the future. Libbey is continuing discussions with its lenders and other stakeholders regarding the terms of a consensual financial restructuring plan.
Certain of Libbey’s existing lenders have agreed to provide up to $160 million in debtor-in-possession 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.
“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,” Mike Bauer, CEO of Libbey, said. “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. We believe this process will help Libbey become an even stronger, more influential partner to our customers, vendors and end users, and ensure we continue to create the most rewarding experiences with our extensive line of high-quality glassware and other tabletop products.
“Throughout our history, Libbey has been dedicated to delivering the finest glassware and tabletop products to the world and empowering consumers to celebrate life’s moments. As we navigate the current environment, we remain focused on providing end users with products that are environmentally sustainable, beautiful and durable. 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 is filing customary first day motions that, once approved by the court, will allow the company to smoothly transition its business into Chapter 11, including granting authority to pay employee wages and benefits and honor customer commitments in the ordinary course of business. The company will also pay vendors in the ordinary course for all goods and services provided on or after the Chapter 11 filing date.