Polyphalt Inc., a Toronto-based manufacturer of paving and roofing materials from recycled rubber and plastics, is attempting to reorganize under Canada's Bankruptcy and Insolvency Act.
The company is ``not ruling out any options'' in its reorganization efforts, according to Douglas Kong, Polyphalt president and CEO. Those options include finding strategic partners for further investment in the company or purchasers for some or all of Polyphalt's assets, Mr. Kong said.
At the crux of Polyphalt's reorganization is a $3 million loan the company negotiated in March with its key secured lender, Hong Kong-based Grandwin Holdings Ltd. Polyphalt received $750,000 of this money, according to company press releases.
On June 4, Grandwin called in the loan. After allowing two extensions, Grandwin demanded immediate repayment June 30, leading Polyphalt to file July 2 for 30 days' protection from its creditors while it tried to reorganize.
According to news reports, under the Bankruptcy and Insolvency Act Polyphalt will be forced to liquidate if its creditors reject its reorganization plan. Mr. Kong, however, insisted it was premature to talk about Polyphalt's potential liquidation. ``We are continuing to talk to possible strategic partners, and we continue to operate as a going concern,'' he said. ``At our facilities, it's business as usual.''
Polyphalt already announced a reorganization last Dec. 31, involving the voluntary dissolution of two of its wholly-owned subsidiaries. Polyphalt Canada Inc., a holding company, had its assets transferred to Polyphalt. GH International Inc., a manufacturer of roof coatings, adhesives and pavement maintenance products Polyphalt acquired in February 2001, continued to operate as a separate division of Polyphalt, the company said.
In the first quarter ended March 31, 2003, Polyphalt lost $650,000 on revenues of $1.1 million. For fiscal year 2002, the company lost $1.3 million on revenues of $6.6 million.
Polyphalt, a member of the Hong Kong-based Cheung Kong Infrastructure group of companies, develops and commercializes polymer-modified asphalt products to serve North American and international markets, according to company publicity. Its technology licensees include 13 asphalt refiners and suppliers in the U.S., Canada, Australia, Europe and China.