LIBBEY INC. COMPANY INITIATES BANKRUPTCY PROCEEDINGS

On 1 June, Libbey Inc., a 200-year-old American glass company, based in Toledo, Ohio, announced the intentions to file a lawsuit for bankruptcy protection as it is provided for in chapter 11 of the US law. The company explains such plans by the negative financial consequences, caused by the COVID-19 pandemic.

Prior to this, Libbey paid about $ 3 million additional bonuses to the employees to persuade them not to leave the company after the salaries were reduced by 20-25%. At the same time, in order to save money, about a half of all the employees, working at the enterprises of the North America, were laid off.

As it was noted in a statement, made by Mike Bauer, the CEO of Libbey, despite the positive dynamics with which the company began to work in 2020, the dramatic and lasting impact of the pandemic on business and a catastrophic drop in demand has been unprecedented over the organization’s more than 200-year history.

The management considers bankruptcy process as a necessary step to restore liquidity, strengthen the balance and improve the company's market position in the future.

Libbey Inc. was founded in 1818 under the name of New England Glass Company, engaged in the production of glassware and other products: glasses, cups and mugs. The main enterprise is located in the city of Toledo (Ohio), which is why the city received the nickname "glass" from the Americans. Edward Drummond Libby moved the company to this city in 1888.

The main customers, purchasing the products of Libbey, have traditionally been restaurants, bars and shops. However, they all were forced to close due to the restrictions, caused by the pandemic. The bankruptcy of the company, as it is reported in an official press release, will be limited to the management company and its 11 subsidiaries, located the United States.

The representatives of the company stated that its international branches in China, Canada, Mexico, Portugal and the Netherlands are not involved in bankruptcy and are operating as before.

In 1987, Libbey Inc. and its subsidiary, Libbey Glass, were incorporated in Delaware, subsequently having become the publicly traded companies on the New York Stock Exchange. At the moment, as indicated in the submitted documents, the brand assets are valued from $ 100 million to $ 500 million, while liabilities to creditors range from $ 500 million to $ 1 billion. The number of creditors of the company varies between 10-25 thousand.

The company indicated that by now it has already managed to agree with the creditors to provide $ 160 million for the restructuring, which includes a $ 100 million revolving credit line and $ 60 million term loan.

In the future, the company expects to receive a loan of $ 30 million as soon as the judge approves the development plan of the company. Libbey also agreed with lenders to postpone payment of a $ 12 million term loan for a couple of months. This time will allow the company to handle the business and draw up a bankruptcy plan.