Buyer emerges for bankrupt M&G plant, but sale still not final – Italian plastics giant M&G USA files for Chapter 11 bankruptcy protection. The company will now have to sell the $1 billion plant it is building in Corpus Christi – Buyer Mossi Ghisolfi M&G plant - Archive
Italian plastics giant M&G USA files for Chapter 11 bankruptcy protection. The company will now have to sell the $1 billion plant it is building in Corpus Christi. Chris Ramirez/Caller-Times
It’s been a rough five months for M&G USA Corp.
The company filed for bankruptcy in late October after its proposed $1.1 billion plastics manufacturing plant in Corpus Christi went significantly over-budget. The company claimed in its bankruptcy filing that the plant was 85 percent complete at that time, and would have needed another $505 million to complete.
The company already had about $500 million in liabilities when it sought bankruptcy protection, and contractors had filed millions of dollars in liens for work they claimed M&G had not paid.
But M&G’s luck might finally be changing.
A newly formed venture called Corpus Christi Polymers LLC has entered into a purchase agreement with M&G for the plant, certain M&G intellectual property, and a desalination/boiler plant. The agreement provides M&G with a binding bid of $1.125 billion in cash and “other capital contributions,” according to a statement from Mexican chemical manufacturing company Alpek S.A.B. de C.V.
“We’re very excited to have companies of this caliber interested in our area,” said Iain Vasey, president and CEO of the Corpus Christi Regional Economic Development Corporation.
Alpek is one of three companies making up the Corpus Christi Polymers venture that provided the bid for the M&G assets in Corpus Christi. The other companies are Indorama Ventures Holdings LP — a subsidiary of Indorama Ventures public company limited — and Far Eastern Investment Holding Limited.
The proposed bid is subject to approval by a U.S. Bankruptcy Court in Delaware and governmental authorities before it becomes official, Alpek representatives said. According to online court records, several companies and lenders had previously filed objections to the proposed sale of the Corpus Christi assets, in part, because of concern that the sale price might not be enough to offset outstanding liens or debt.
Charlie Zahn, chairman of the of the Port of Corpus Christ Commission, said he was glad to hear M&G’s facility could be completed and put into operation under new ownership. The new plant would mean more jobs for the area during construction and after it is completed.
“We are pleased to see robust interest in these assets,” Zahn said. “The port wants all its customers to be successful and the apparent strong partnership of Alpek, Indorama and Far Eastern Group raises our confidence that this facility will be completed, thereby creating more jobs and more economic vitality for the Coastal Bend.”
The proposed plant would produce between 1.1 million and 1.3 million metric tons of purified terephthalic acid (PTA) and polyethylene terephthalate (PET).
PET is a form of polymer used in the production of plastic bottles or containers for food packaging and beverages, along with personal care products and other consumer goods. PTA can be used to make polyester fibers for clothing, bed sheets, curtains and bedspreads.
According to the terms of the agreement between the three companies, the parties will provide resources to Corpus Christi Polymers to complete the stalled M&G plant “in the most efficient and cost effective way.” A timeline for that to occur was not given. Once finished, the plant would reportedly be the largest facility of its type in the world, and the largest PTA plant in the Americas, officials said.
Alpek, Indorama and Far Eastern will each also receive one-third of the capacity of PTA and PET produced at the Corpus Christi plant upon completion. Each of the partners will procure raw materials independently, while also independently selling and distributing their corresponding PTA and PET.
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