Profile and film extruder CPI Plastics Group Ltd. is up for sale while it is protected from creditors.
The Mississauga, Ontario, company was placed into receivership Jan. 8, following a petition by its main secured lender, Bank of Montreal.
The Toronto office of Deloitte & Touche Inc. was appointed receiver and manager of the business. CPI is running production while a buyer is sought.
CPI is also getting protection from creditors in the United States. On Jan. 9, CPI was granted protection under Chapter 15 of the U.S. Bankruptcy Code. Chapter 15 protects U.S. assets while a company undergoes bankruptcy proceedings in a foreign country. CPI's main U.S. asset is a films plant in Pleasant Prairie, Wis.
CPI succumbed mainly to the U.S. recession, court documents indicate.
The company lost C$3.4 million (US$2.7 million) in its fourth quarter, which violated loan covenants with Bank of Montreal. CPI engaged in a restructuring effort but it was unsuccessful and the bank demanded payment on Jan. 7. CPI then announced its secured lender planned to take over CPI's assets.
CPI has outstanding liabilities of C$54.4 million (US$43 million), 62 percent of which are held by Bank of Montreal. U.S. creditors are owed less than 10 percent of the liabilities.
CPI employs 600 at five facilities and runs more than 135 extrusion lines. It operates three divisions. Outdoor Living Products Group makes Eon-brand decking and fencing, and cladding and accessories for hot tubs. The Film Products Group makes branded and private-label trash and kitchen bags. The Custom Products Group extrudes custom profiles for a range of industries, including appliances and automotive.