Strategic Materials files Chapter 11 bankruptcy
From: https://www.recyclingtoday.com/news/strategic-materials-files-chapter-11-bankruptcy/
Houston-based Strategic Materials Inc. (SMI) has announced a comprehensive restructuring designed to position the company for long-term growth.
On Dec. 4, SMI, North America’s largest glass recycler, and certain of its U.S. domestic subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. The cases are pending before Judge Christopher M. Lopez and are jointly administered under Case No. 23-90907.
The company says it intends to operate in the ordinary course of business without disruption during the restructuring.
SMI’s Canadian and Mexican operating affiliates are not part of the Chapter 11 bankruptcy process.
SMI has more than 40 locations in the U.S. and recycles more than 2 million tons of glass per year, serving end markets that include glass packaging, fiberglass insulation, flat glass and highway safety bead markets, the air-blast abrasives industry, the specialty glass industry, the recycled plastic resin market and the glass fillers industry.
The company has secured new money commitments of $23 million, subject to court approval, for a debtor-in-possession (DIP) financing facility from existing lenders to support its business operations. The facility will allow SMI to continue meeting its obligations across the entire enterprise, including to customers, suppliers and employees, while financially restructuring and reorganizing, including deleveraging the balance sheet by more than $300 million, according to the company, which adds that the restructuring will enable the business to grow and operate sustainably and deliver high-quality products while maximizing value for all stakeholders.
SMI has filed certain customary "First Day" motions with the court to ensure operations continue without interruption. All employees will continue to receive pay and benefits, and suppliers of goods and services will be paid.
"We play a critical role for the customers and communities we serve," says Chris Dods, CEO of SMI. "The past several years presented significant operational and financial challenges, requiring a comprehensive restructuring of the balance sheet of the company. We are grateful for the demonstration of confidence in our underlying business, represented by substantial new financing committed from the lender group."
A combined hearing to consider the adequacy of the disclosure statement, the solicitation and tabulation procedures, and confirmation of the plan, will occur Jan. 10, 2024, at 10 a.m. Central before Judge Lopez, according to the information available here, which is administered by the company’s claims agent, Kroll.