27 July 2009 12:44 [Source: ICIS news]
LONDON (ICIS news)--La Seda de Barcelona is to lay off 300 staff, close five plants and raise funds as part of a restructuring plan that will allow it to focus on polyethylene terephthalate (PET) production, the Spanish chemicals company said late on Sunday.
La Seda plans to sell its Simpe plant in Italy, Portalegre in Portugal, Volos in Greece, TurkPet in Turkey and IQA in Tarragona, Spain.
The company said it hopes to raise between €250m-€320m ($357m-$457m), which will help it meet restructuring conditions outlined by its bank.
La Seda said it intends to lay off 300 staff, 240 of whom will lose their jobs as a result of the closure of the 500,000 tonne/year upstream purified terephthalic acid (PTA) site at Wilton, in the UK.
The Wilton plant has been down for four months and remains on force majeure.
The company said its San Castle factory, at Cadiz, Spain, would need to reduce labour costs and lower its commodity and energy prices if it wanted to remain competitive with Middle East-based factories.
La Seda said it believed the restructuring plan would allow it to focus more on its PET production and maximise synergies between its PET and packaging businesses.
The company said it wants a 35% share of the European PET market at the end of three years, while it also wants to increase production of recycled PET.
La Seda’s shares remain suspended due to disagreements over its 2008 accounts, which have now been re-released three times. Four board members have refused to approve the accounts.
The suspension of shares has not affected manufacturing operations, as this was purely a “political issue”, a company source told ICIS news.
La Seda's 2008 earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 37% to €78.4m, down from €124.4m in 2007.
The company has benefited from July's high prices of PET in Spain, which have soared because of a lack of availability.
July prices of PET in Spain and the surrounding regions have surpassed the €1,000/tonne mark, up from the mid-€900s/tonne seen in June, while other western European countries had July prices of €925-960/tonne for local product.
($1 = €0.70)
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