Another block of housewares production assets is up for sale. Zeta Consumer Products Corp. is continuing operations on a limited scale as it seeks a buyer for some or all of its operations. Zeta filed for protection under Chapter 11 of the U.S. Bankruptcy Code in Newark, N.J., on April 25. In early April it laid off most of its 800 workers.
Zeta plans to fund limited operations with a $5 million debtor-in-possession line of credit with its working capital lender. Stephen Hopkins, recently named president of Little Falls, N.J.-based Zeta, would not disclose the identity of the lender.
Also up for sale is housewares and furniture molder Euro United Corp. of Oakville, Ontario. Euro filed for bankruptcy protection late last year. KPMG Inc. of Toronto is acting as receiver for Euro and has been trying to find a buyer for some or all of its assets. A KPMG spokesman said in an April 27 interview that Euro is not in production while KPMG continues talks about a possible sale.
Home Products International Inc. of Chicago, or parts of it, also might be up for sale. Late last year it hired First Union Securities Inc. to help HPI enhance shareholder value. Officials could not be reached to comment on which strategy HPI will pursue.
Zeta had sales of about $100 million for its fiscal year ended Oct. 31. Last month, Zeta majority shareholder Alfred Teo confirmed Zeta was closing plants and said the firm had been losing $50,000 a day. He blamed losses on high resin prices and the reluctance of mass merchandisers to accept and pass on higher costs. In a recent news release, Hopkins reiterated those problems and said there is intense competition in the consumer plastics industry.
"The bankruptcy filing became necessary when Zeta exhausted its borrowing capacity under its line of credit and was unable to obtain the additional funding needed to continue full-scale manufacturing operations," Hopkins said.
"Now that the bankruptcy filing has clarified the company's situation, we will be attempting to locate a buyer or buyers for the company or any of its assets."
Zeta has a film and trash bag plant in Macomb, Ill. It has Tucker housewares plants in Leominster, Mass.; Arlington, Texas; and Kingman, Ariz. Hopkins said in a telephone interview that Zeta still is evaluating which operations will run on a limited basis. Its debtor-in-possession line of credit requires bankruptcy court approval and satisfactory loan documentation.
Zeta almost closed its Kingman plant last year but changed its mind when an executive who helped found the operation joined Zeta. Chubby Celli joined Zeta as vice chairman when he and his son John bought equity in Zeta last year. Chubby Celli had been with Tucker when Mobil Chemical Co. owned it.
Meanwhile, in Leominster, a job fair will be held May 8-9 at the local Career Center for the displaced workers from Tucker Housewares.
Joseph C. Mello, regional Rapid Response Team coordinator, said April 25 that at least 25 local companies have agreed to participate in the job fair for Tucker employees. He added that a third day would be added if necessary.
The Rapid Response Team is run by the Corporation for Business, Work and Learning, a state agency to help displaced workers.
Plastics News correspondent Frank Antosiewicz contributed to this story.