Neo Industrial (OMXH: NEO1V) announced that two of its group companies in the now defunct Viscose segment have filed for bankruptcy. Avilon Fibres Ltd was touted as a big hope for the future as one of the world leaders in viscose fibre manufacturing that has been expected to grow due to tighter fire safety requirements. Its parents firm Carbatec has also filed today. Neo Industrial does not expect any immediate cash flow effects and aims to clarify balance sheet items as soon as possible. Its Cable segment is not in any way tied to the said companies.
Avilon first went through a restructuring where its debt was cut noticeably. Now those cuts will revert back to former state, which should mean a multi-million Euro item on the parent company. Neo Industrial blames lower energy remarkably lower energy costs that its competitors mainly in China enjoy. That has kept viscose market price depressed and looks set to continue to do so. The company invested heavily on niche product development but has been unable to commercialize those innovations. Neo Industrial acquired the segment from Kuitu Finland Oy, which was bankrupt as well. Its 150 employees had already been laid off since 2011.
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