EXCLUSIVE: Plastics compounder and recycler Regain Polymers is seeking to enter a Company Voluntary Arrangement (CVA) after a ‘massive reduction’ in credit limits from suppliers, letsrecycle.com can reveal.
Suppliers to the company were contacted last week by Regain’s managing director Michael Eidecker who informed them that Regain is proposing the CVA in order to deal with an “unbearable level of debt owed from historic developments.”
Feedstock of blended polypropylene prior to extrusion at Regain’s Allerton Bywater plant
The move would prevent the company going into administration.
Entering into a CVA means that the company can continue to trade, if existing creditors agree to accept a debt settlement. A meeting of creditors has been scheduled for 7 December, in order for the proposals to be considered, according to James Patchett of accountancy firm Turpin Barker Armstrong, joint nominees for the proposal.
The firm will oversee the CVA. Mr Patchett told letsrecycle.com that all of Regain’s creditors have been notified of the CVA proposals.
Aurelius
Regain’s problems have been linked to sister company Evolve Polymers, which was sold in a pre-pack administration arrangement this month (see letsrecycle.com story). The companies are connected as both were acquired by the investment firm Aurelius (see letsrecycle.com story). When contacted by letsrecycle.com Aurelius declined to comment.
Regain has noted that its own suppliers have cut credit limits with the company over fears that it could follow Evolve into administration.
In his email to suppliers last week, Mr Eidecker reiterated that the company has not been placed into administration. He wrote: “Regain has lately taken a significant hit on Working Capital after our Sister Company Evolve (PET Recycler) has been sold within an Asset Deal and left in administration. As a result of those events, the spreading nervousness around the market and suppliers caused the loss of nearly £2M of credit limits with the supplier base of Regain who were expecting similar events at Regain.”
Credits
According to Mr Eidecker, the withdrawal of credits from the business ‘has become too much to handle’ and he said that the company was forced to seek an alternative solution to prevent Regain entering administration.
Regain is credited as being the one of the UK’s leading compounders and recyclers of post-use, hard plastics. Founded in 1991 under the name Linpac Recycling Ltd, the company operates at a site in Allerton Bywater in Yorkshire.
The company specialises in the extrusion of recycled hard plastics for the automotive, environmental, horticultural, packaging, and construction industries. Materials handled include HDPE, PP, talc-filled polypropylene (PPT), and polystyrene. Its current extrusion capacity across eight extrusion lines totals around 46,000 tonnes per year.
Following the acquisition of Regain in July 2015, owners Aurelius carried out a series of restructuring measures which it said had ‘led the company out of the red and contributed significantly to increasing EBITDA’ in the second half of 2015.
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Source: letsrecycle.com Plastic
