American sister company of closed UK outfit files for Chapter 11

UK firm's collapse blamed on Brexit - but was it really the Yanks?

First API blamed Brexit for closing its UK operation throwing hundreds out of work from its three manufacturing plants, then an insider said it was lost contracts, but now it seems the reason lies across the Atlantic.

Print Week reporter Richard Stuart-Turner reported yesterday that their USA sister company has filed for Chapter 11 protection blaming market shrinkage – Chapter 11 being a form of legal protection for ailing firms in the states.

He reported: “Foil and laminate manufacturer API Americas, based in Kansas, made the filing on Sunday (2 February), listing $44.4m (£31.1m) of secured debt. In a first-day declaration, chief restructuring officer Mitchell Gendel attributed the firm’s situation to unforeseen costs relating to its relocation to a new facility and ‘a significant drop in demand for their products, due to unfavourable market dynamics and a shift toward more environmentally sustainable products’.

“The drop in demand was also attributed to tobacco customers shifting to lower-cost, alternative packaging, and competitive pressures due to overcapacity in the industry. In turn, the declining demand has led to decreased free cashflow and operating losses.

“The declaration said the company’s consolidation into new premises had resulted in a net investment of around $8m and was followed by ‘unforeseen expenses due to the relocation and start-up inefficiencies’. As a result, sales in the foils business unit declined by approximately $6m from 2016 to 2019.

“Furthermore, the declaration stated that API Americas’ acquisition of a laminates plant was also followed by “unforeseen expenditures and adverse market conditions” and that, as a result, its laminates business unit revenue declined by approximately $5m from 2017 to 2019.”

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