The company, which handles around 140,000 tonnes-a-year of waste plastic bottles at its Hemswell bottle recycling plant in Lincolnshire, has been particularly affected by the downturn in the PET market, which has seen the value of rPET – the plant’s primary product – tumble.
Eco Plastics has had investment in the £15 million sorting and wash plant from both the Waste & Resources Action Programme (WRAP) and also Coca Cola Enterprises, as part of the joint venture ‘Continuum Recycling’ to supply Coca Cola with the recycled plastic needed to meet its pledge to include 25% of recycled plastics in its bottles. The plant is one of the largest of its kind in Europe.
Sale
Speaking today, Jonathan Short, founder and deputy chairman of ECO Plastics, confirmed that the company is up for sale.
He said: “ECO Plastics recently initiated a sales process to provide a long-term platform for the future strategic development of the business. As part of this process, the board and existing shareholders have held talks with interested parties. The company has the support of its debt-holders in achieving this goal. Further announcements will be made if and when appropriate.”
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The news comes after one of the company’s largest investors, the Ludgate Environmental Fund, revealed to the London Stock Exchange that it had written £2 million off the value of the company.
In a statement posted yesterday (December 8), Ludgate stated: “As disclosed in the circular to shareholders dated 12 August 2014, there have been recent operational challenges at Eco Plastics and unfavourable market conditions. Unfortunately, this situation has not improved in recent months, and although the Company has been working with creditors to find a solvent solution, this is no longer expected to be achieved.
“As a result, the carrying value of ECO Plastics as at 30 September of £2.0m has been written off. ECO Plastics represented 3.8p or 5.7 per cent of the unaudited Net Asset Value per share as at 30 September 2014 of 66.5p.”
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