Leading Edge Packaging Inc. is restructuring in conjunction with the unexpected need to establish a wholly owned manufacturing facility in China.
Leading Edge is outfitting a 100,000-square-foot leased plant in Zhongsan township and, by early March, plans to ramp up production of its packaging for jewelry, watches, optics and high-profile premiums. An affiliate had been arranging for interim production by January.
The Zhongsan site is an alternative to a former joint venture's Shilong township facility, which has injection molded polypropylene and high density polyethylene and also processed metal, wood and paper. Both locations are in Guangdong province.
On Nov. 21, Hua Nam Enterprises Ltd., a 40 percent partner, unilaterally closed down the venture, Dongguan Walford Ornaments Packaging Co. Ltd. Leading Edge had a 60-day inventory, but the abrupt stoppage at its sole plant was expected to cause significant short-term losses.
Leading Edge, which owns 60 percent of the venture, has instructed its Hong Kong and China lawyers to file claims on the assets of Dongguan Walford.
The restructuring involves the issuance of redeemable preferred stock and authorization for new investor BroadAsia Partners LLC, a New York investment bank, to nominate two board-of-director candidates including one to serve as chairman. The board approved the retirement of Lip-Boon Saw as chairman; Saw continues as chief executive officer.
New York-based Leading Edge, a Nasdaq-traded issue, had profit of $612,000 on sales of $9.2 million for the six months ended Sept. 30.