A Canadian auto supplier that invested in a consolidated plant in St. Thomas, Ontario, in 2018 is now in bankruptcy as court-appointed advisors either complete a sale or wind down operations.
Sle-Co Plastics Inc. is a Tier 2 injection molder making both interior and exterior parts.
In a Jan. 13 filing with the Ontario Superior court of Justice in Bankruptcy and Insolvency, BDO Canada Ltd., which is acting as a receiver for the company, said that Sle-Co owner Jeffrey Sleeger and the company could not repay more than C$11 million (US$8.2 million) it owes the Royal Bank of Canada.
During 2018, BDO stated, Sle-Co consolidated three separate locations in London, Ontario, into the St. Thomas site, a facility that had been vacant for several years.
Cost overruns in preparing the new site for production, in relocation costs and operational issues during the start-up at the new site all "negatively impacted" the company. In addition, a major contract with one of its customers ended, which led to what the bank termed "significant cash flow issues" in another court document.
BDO has been working with potential buyers who could buy the business. As of mid-January, it said it is "working with an offer, but if a satisfactory agreement cannot be negotiated," it will close the business.
The London Free Press reported Sle-Co had employed as many as 175 people, but was down to about 25 as of late January.