Fire, winter freeze push US Ascend into bankruptcy

HOUSTON (ICIS)–Ascend Performance Materials was already reeling from overcapacity in China and an industrial recession when its main complex caught on fire and a freeze shut down its operations in Texas – events that contributed to the bankruptcy of the nylon 6,6 producer.

Ascend Performance Materials filed for bankruptcy protection under Chapter 11 on Monday. The filing will allow Ascend to continue operations and protect it from creditor lawsuits while it reorganizes its finances.

Ascend already has support from its lenders, and it expects to emerge from bankruptcy protection in six months.

NYLON MARKET ALREADY STRUGGLING WITH OVERCAPACITY
John Rogers, an analyst at Moody’s Ratings, noted how the entrance of China caused fundamental changes to the nylon market.

“The issue for Ascend was the increased capacity in China by established western producers and domestic companies along with the ability of Chinese producers to now produce [adiponitrile] and [hexamethylene diamine], two key intermediates that have sustained Ascend’s margins during prior downturns.”

Over the past six years, Chinese production capacity for chemical intermediates has grown by 93%, and downstream production by 64%, said Robert Del Genio, Ascend’s chief restructuring officer. He made his comments in court documents.

Many of these new market entrants from China sought to gain market share by selling at a cash loss or pursuant to subsidies from the Chinese government, Del Genio said. Ascend was faced with grim choices. It could cut prices or lose customers to these new entrants.

Meanwhile, a prolonged recession has struck manufacturing, a key end market for the nylon produced by Ascend. Many of the company’s key end markets have been slow to recover to pre-pandemic levels of production because of destocking, inflation, labor shortages and supply-chain issues, Del Genio said.

Weak demand has caused prices for nylon 6,6 to fall and Ascend’s EBITDA margin to approach its lowest level in almost a decade, Del Genio said.

For chemical intermediates, long-term take-or-pay contracts signed when times were good have turned into money losers under these tougher economic conditions. Ascend was forced to sell at a loss under these contracts.

CLOSURE OF BARGE CHAMBER ADDS MORE EXPENSES
Ascend’s main inland barge chamber at Wilson Lock had been closed after cracks were discovered in the lock gates in September 2024, Del Genio said.

Wilson Lock is the only way that barge shipments can enter and leave the company’s operations in Decatur, Alabama, Del Genio said. With Wilson Lock shut down, the Decatur site has had to rely on trucks to ship acrylonitrile (ACN) from Texas and to move adiponitrile (ADN) to Pensacola.

“The use of a trucking alternative has had a $4 million impact on the company’s first two quarters of financials in 2025 in addition to significantly increasing transit times,” Del Genio said.

Trucking also added delays, which left Ascend’s Decatur and Pensacola operations vulnerable to disruptions, Del Genio said. To prevent this, Ascend bought ACN and ADN from third parties at a premium, adding an additional $4 million in expenses.

FIRE, FREEZE PROVE TOO MUCH
In December 2024, a fire started at Ascend’s main nylon complex in Pensacola, Florida, which disrupted operations until the middle of February 2025, Del Genio said.

The fire cost Ascend $6 million in earnings before interest, tax, depreciation and amortization (EBITDA).

About a month after the fire, sub-freezing temperatures hit Texas, where Ascend makes hydrogen cyanide (HCN) and ACN at its complex in Chocolate Bayou, Del Genio said. As a proactive step, Ascend shut down its operations at Chocolate Bayou to prevent mechanical failure and threats to the environment.

The shutdown of Chocolate Bayou led to a cascade of side effects. Ascend’s operations in Decatur, Alabama, needed the ACN from Chocolate Bayou to continue running, Del Genio said. The shutdown of Chocolate Bayou forced Ascend to buy ACN on the open market so it could keep Decatur running. Those purchases further depleted the company’s cash reserves.

Overall, the closures of Chocolate Bayou, Pensacola and Wilson Lock lowered Ascends Q1 EBITDA by $21 million, Del Genio said.

HEADING TOWARDS BANKRUPTCY
In response to a worsening liquidity crisis, Ascend increased its vendor payment deferrals. By late February, the company’s past-due accounts-payable wall exceeded $110 million.

Vendors responded by demanding cash in advance, tightening payment terms, threatening to remove rental equipment and freezing supplies of goods and services.

The company was approaching a breaking point. Ascend owed money to companies that provided critical goods and services. If these companies cut off Ascend, it could bring the company’s plants to a halt.

Ascend arranged bridge loan financing that gave the company enough time to file for bankruptcy protection in US District Court, Texas Southern District. The case number is 25-90127.

(Thumbnail shows nylon. Image by Shutterstock)