West Yorkshire-based plastics compounding and recycling firm Regain Polymers has agreed a company voluntary arrangement (CVA) with creditors, meaning it has avoided going into administration.
Suppliers to the business were contacted last month after the company had sought to reach a debt settlement due to an ‘unbearable level of debt owed from historic developments’.
A meeting was held in Leeds this month (7 December) at which the CVA proposals were formally put to creditors and approved “without modification” according to James Patchett of accountancy firm Turpin Barker Armstrong, which is a joint nominee for the proposal.
Entering into a CVA means that the company can continue to trade, if existing creditors agree to accept a debt settlement. Had an agreement not been reached, the company would have been placed into administration.
The proposals agreed by Regain’s creditors mean that they will receive an estimated dividend from the company’s future earnings of around 33.55 pence for every £1 owed. This compares to a dividend of 1.87 pence in the pound had Regain entered administration.
Documents issued to creditors ahead of the meeting suggested that the company owed unsecured creditors around £4.7 million.
Regain’s problems have been linked to sister company Evolve Polymers, which was sold in a pre-pack administration arrangement last month (see letsrecycle.com story). The companies are linked as both were acquired by the investment firm Aurelius (see letsrecycle.com story).
In an email to creditors last month, Regain’s managing director Michael Eidecker noted that suppliers had cut credit limits with the company over fears that it could follow Evolve into administration.
Regain is credited as being the one of the UK’s leading compounders and recyclers of post-use, hard plastics. Founded in 1991 under the name Linpac Recycling Ltd, the company operates at a site in Allerton Bywater in West Yorkshire.
Regain specialises in the extrusion of recycled hard plastics for the automotive, environmental, horticultural, packaging, and construction industries. Materials handled include HDPE, PP, talc-filled polypropylene (PPT), and polystyrene. Its current extrusion capacity across eight extrusion lines totals around 46,000 tonnes per year.
Following the acquisition of Regain in July 2015, owners Aurelius carried out a series of restructuring measures which it said had ‘led the company out of the red and contributed significantly to increasing EBITDA’ in the second half of 2015.