10 November 2008 23:54 [Source: ICIS news]
HOUSTON (ICIS news)--US polyethylene terephthalate (PET) producer Wellman said on Monday that its third-quarter operating loss rose by $30m (€23m) year over year due to lower sales volumes.
Wellman attributed the lower sales to its bankruptcy filing. The company filed for bankruptcy protection earlier in the year.
Wellman's bankruptcy financing limited the company's liquidity, which further lowered its sales, the company said.
In addition, Wellman took a $7m charge connected to the shutdown of its corporate headquarters in Fort Mill, South Carolina, and its Palmetto plant in Darlington, South Carolina, the company said.
Wellman took another $4m charge because it agreed to sell its recycled-based business.
In all, Wellman's bankruptcy has caused the company to delay the release of its third-quarter earnings, the company said. Wellman did not specify when it would release its earnings.
Wellman has a Tuesday deadline to avoid defaulting on its bankruptcy financing. Companies under bankruptcy protection typically fund their operations through debtor-in-possession (DIP) financing.
Wellman has repeatedly received one-week extensions to meet the milestones of its DIP financing. Those milestones involved the company's disclosure statement and receiving a commitment to backstop a rights offering.
Wellman received another such extension on 4 November, the company said.
As such, Wellman has a Tuesday deadline to meet the milestones, although the company could receive yet another one-week extension.
In addition, the amount of financing available to Wellman has been reduced to $100m, Wellman said. Earlier, the amount was $170m.
($1 = €0.78)
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