It looks like the renewable chemicals/bio-materials industry is now seeing the start of restructuring with LS9 recently being acquired by Renewable Energy Group, Codexis changing its business strategy and focus, and now Cereplast filing for bankruptcy.
The Indiana-based bioplastic producer has filed voluntary petition for relief under Chapter 11 in the US Bankruptcy Court led by the lack of traction of bioplastic demand in the US, repetitive delays in the implementation of bioplastic regulation in Europe especially in Italy, and legal problems created by several of Cereplast’s lenders.
Cereplast said it file for the bankruptcy protection in order to strengthen its balance sheet, clean up its capitalization structure, and gain financial flexibility as it continues to realign its operations. Cereplast said it will continue to operate during the reorganization process. The company is expecting to lay-off several employees.
In conjunction with the reorganization, Cereplast is actively negotiating a debtor-in-possession financing from several interested parties. The company intends to file various motions with the Court in support of its reorganization, including requesting authorization to continue paying employee wages, and providing health care and other benefits. The company will also ask for authority to continue existing customer programs and intends to pay vendors for goods and services as authorized by the Court.
Cereplast expects to redirect its operations in two directions: (1) toward traditional compounded products and recycling polyolefin, and (2) bioplastic made of diversified feedstock including algae and polylactic acid (PLA).