By Peg Brickley
Plastipak Packaging Inc. of Michigan outbid Australia's Amcor
Ltd. at a bankruptcy auction for substantially all of the assets of
Constar International Holdings LLC, a Philadelphia-based maker of
plastic bottles, court papers say.
Constar was put up for sale Thursday, and Plastipak won with an
offer of $102.45 million. Amcor, which kicked the bidding off at
$68.5 million, stopped at $102.1 million, according to a
source.
A judge is set to consider approving the sale Monday.
The result is good news for employees of Constar, which has
struggled through two previous bankruptcies in recent years.
Plastipak is expected to continue operations at the company's
plant, which produces plastic food and beverage containers.
Plastipak couldn't immediately be reached to discuss its plans
for the company.
Plastipak is buying the U.S. operations, which employed 470
people as of the time the company sought Chapter 11 bankruptcy
protection on Dec. 19, 2013. Separately, Constar agreed to sell its
Havre de Grace, Md., plant to food company J.M. Smucker Co. of Ohio
for $3.1 million. Assets in the U.K. and Netherlands are also being
auctioned as Constar tries to pay its bills.
After two court-supervised balance-sheet reshapings, Constar
returned to bankruptcy last year still freighted with $123 million
of funded debt. Owned by an assortment of former creditors,
including hedge funds managed by Solus Alternative Asset Management
LP, Black Diamond Capital Management LLC and J.P. Morgan Chase
& Co., Constar decided this time to look for a new owner.
Spun off from Crown Holdings Inc. more than a decade ago,
Constar was unable to generate enough profits to cover its debts.
It was dealt a blow in December 2012 when it lost its largest
customer, Pepsi-Cola Advertising and Marketing Inc.
Write to Peg Brickley at peg.brickley@wsj.com
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