Libbey Glass Inc. – Leading Glass Tableware Manufacturer Files Chapter 11, Lines Up $160mn of DIP Financing as Restructuring Talks with Key Stakeholders Continue

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June 1, 2020 – Libbey Glass Inc. and ten affiliated Debtors (“Libbey” or the “Debtors”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 20-11439. The Debtors, one of the world's largest glass tableware manufacturers, are represented by John H. Knight of Richards, Layton & Finger, P.A. Further board-authorized engagements include (i) Latham & Watkins LLP as general bankruptcy counsel, (ii) Alvarez & Marsal North America, LLC as financial advisors, (iii) Lazard LTD as investment banker  and (iv) Prime Clerk as claims agent. 

The Debtors’ lead petition notes between 10,000 and 25,000 creditors; estimated assets between $100.0mn and $500.0mn; and estimated liabilities between $500.0mn and $1.0bn. The Debtors' 2019 10-K notes assets of $706.7mn and liabilities of $732.5mn. Documents filed with the Court list the Debtors’ three largest unsecured creditors as (i) Microsoft Corporation ($3.6mn trade debt claim), (ii) UTC Overseas Inc ($3.3mn trade debt claim) and (iii) Shandong Silver Phoenix Co. ($1.7mn trade debt claim).

In 2019, Libbey Inc.'s net sales totaled $782.4mn.

In a press release announcing the filing, the Debtors advised that: “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 constructive discussions with its lenders and other stakeholders regarding the terms of a consensual financial restructuring plan and is focused on moving through the process as efficiently as possible. 

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."

On May 25th, 2020 (8-K), the Debtors entered into a 5th amendment to their senior secured credit agreement which provided for an extension, from May 25, 2020 to May 31, 2020, of the date by which they were required to make a prepayment of approximately $12.0mn.

Mike Bauer, the Debtors chief executive officer, added: "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. 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 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….Libbey [intends] 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."

DIP Financing

The Debtors state that "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"

About the Debtors

According to the Debtors: "Based in Toledo, Ohio, Libbey Inc. is one of the largest glass tableware manufacturers in the world. Libbey Inc. operates manufacturing plants in the U.S., Mexico, China, Portugal and the Netherlands. In existence since 1818, the Company supplies tabletop products to retail, foodservice and business-to-business customers in over 100 countries. Libbey's global brand portfolio, in addition to its namesake brand, includes Libbey Signature®, Master's Reserve®, Crisa®, Royal Leerdam®, World® Tableware, Syracuse® China, and Crisal Glass®. In 2019, Libbey Inc.'s net sales totaled $782.4 million."

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