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Libbey Outlines Plan to Emerge From Bankruptcy
August 17, 2020
Source: HFN
The glassmaker has received $150 million in exit financing from seven of its lenders
Libbey has outlined a restructuring plan as part of its efforts to emerge from bankruptcy.
The plan, filed today with the U.S. Bankruptcy Court for the District of Delaware, outlines its proposal to strengthen its balance sheet, reduce debt and improve liquidity.
The glassmaker has received a term sheet from seven of its lenders to provide $150 million in exit financing, which after fees and repayment of the company’s existing debtor-in-possession financing will provide $75 million of incremental funding for future operations, the company said in a statement. Libbey also expects to replace its $100 million DIP revolving credit facility with a new exit facility with approximately $20 million initially drawn.
Overall, Libbey said it expects to emerge from the Chapter 11 process with less than $200 million of funded debt, compared to more than $400 million of debt that existed at the beginning of the court-supervised process.
The company, as required, will also modify its Collective Bargaining Agreements (CBAs) and certain union-related retiree benefits. Under the terms of the company’s proposals to the unions, Libbey is seeking to modify wages, certain benefits (including freezing future benefit accruals under its hourly defined benefit pension plan) and certain work rules for its U.S. union employees.
Libbey will also reduce its salaried headcount and the wage and benefit costs relating to its salaried employees, as well as non-salary related costs.
As previously announced, Libbey will close its manufacturing facility in Shreveport, La., ceasing production by the end of 2020, with full closure by the second half of 2022. Libbey said it is negotiating with the United Steelworkers representing Libbey employees regarding the effects of the facility closure.
“We continue to make important progress and are on a path to complete our restructuring later this year,” said CEO Mike Bauer. “While we recognize the impact of the proposed modifications to the CBAs for our union employees and union retirees, we believe the changes are essential to ensure our successful emergence from Chapter 11. The cost savings and operational improvements they will help us achieve will preserve approximately 1,200 U.S. jobs and make Libbey a stronger company going forward. We remain committed to continuing good-faith negotiations with our unions throughout this process.”
A Court hearing to consider approval of the Disclosure Statement related to the Plan is scheduled for August 21. Following court approval of the Disclosure Statement, Libbey will distribute the plan and Disclosure Statement to voting creditors for their consideration.
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