Avilon Ltd, a part of Neo Industrial’s(HSE: NEO1V) Viscose Fibre business has applied for corporate restructuring on Wednesday. Tough liquidity situation, something that was alluded to before when Neo Industrial said Avilon is temporarily shutting down, is given as the reason. Back then Neo Industrial was hoping for sales out of existing stock to ease the situation but now says they have been less than expected.
Neo Industrial continues to argue that long-term prospects for Avilon are promising. USA is the main market for Avilon’s fire-retardant fibre and continued housing market weakness there causes problems for the company. The negotiations concerning Avilon’s technology related business are supposedly progressing ”well” and may have a material impact on Avilon’s fiscal situation.
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