Profile and film extruder CPI Plastics Group Ltd.'s secured lender, Bank of Montreal, plans to take over the company's assets, and CPI's chief executive officer has stepped down.
In a Jan. 7 news release, the company announced that ``it has been unable to withstand the ravages of the current economic crisis and has been unable to gain the support of its secured lender to restructure CPI's financial affairs.
``After the close of markets today, the lender demanded immediate repayment of all of CPI's credit facilities and notified CPI that the lender intends to enforce its security over all of CPI's assets if repayment cannot be made. CPI understands that the lender will move immediately for the court appointment of an interim receiver over all of CPI's assets. CPI does not intend to object to the appointment.''
CEO Peter F. Clark resigned, and the company noted that all of its directors, including Clark, ``have also resigned or indicated their intention to resign.''
Back in November, Mississauga-based CPI had announced plans for a financial restructuring. At the time, vice president of legal affairs and general counsel Paul Huston said CPI needed to come up with as much as C$3 million (US$2.4 million) and several options were being considered, including issuing of warrants or a private placement.
Huston said the firm had been hurt by a slowdown in the housing market, which was affecting sales of its hot tub components, railing and decking. The company recorded a net loss of C$2.4 million (US$1.9 million) for its second quarter ended June 30 compared with a loss of C$962,000 (US$767,000) a year earlier.