The companies of discontinued Viscose segment of Neo Industrial Plc, Avilon Fibres Ltd and Carbatec Ltd, have filed for bankruptcy.
Avilon Fibres Ltd (previously Avilon Ltd) applied for corporate restructuring on 7 September 2011 and was accepted for restructuring program on 28 June 2012. The restructuring's objective was to secure company's long-term development by ensuring short-term operating conditions. After bankruptcy the restructuring program expires and the cut debts of Avilon Fibres Ltd will revert to former state accordingly.
The most significant factor for the current situation has been the extremely low market price level of viscose fibre during the last two years, and this trend is still continuing, Neo Industrial explains. Therefore, restarting and financing profitable viscose production have not been possible. Despite of the fact that global viscose market is increasing annually by over 10%, the market price level is not expected to go up, the company says, and the most crucial factor that reduced the competitiveness of Avilon Fibres Ltd has been the cost of energy which is remarkably lower in the operational environments of its competitors.
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