Plastic bottle manufacturer Constar filed for bankruptcy protection Wednesday, six years after its 2002 spinoff from Crown Holdings.
The Philadelphia Inquirer reported that Constar prearranged the bankruptcy with key creditors in a plan to reduce its debt by $175 million and eliminate $19.3 million in annual interest payments. The deal will wipe out current shareholders, including Crown, but the loss will be minimal as the company’s stock has fallen as low as 4 cents. Constar has reported $324 million in net losses between 2003 and 2007, and the company’s bankruptcy filing said it has $420 million in assets compared to $638 million in debt.
John Maddox, an industry consultant based in Florida, told the Inquirer that Constar’s not the only manufacturer struggling in the PET container industry. Bottle makers, he said, have been squeezed between plastic resin suppliers and beverage companies, who have been manufacturing more of their own bottles.