CarbonLite Holdings LLC is selling all three of its PET recycling plants in the company's bankruptcy.
The buyers are private equity firm Sterling Group, Indorama Ventures and DAK Americas LLC. Each company is buying one CarbonLite plant.
The Los Angeles-based company, which has called itself the world's largest recycler of PET bottles, filed for Chapter 11 protection in March, blaming the pandemic and economic challenges in recycling markets.
The company had hoped to emerge from the financial reorganization, but that ultimately proved too difficult, forcing the plants to be sold off in auctions in federal bankruptcy court in recent days.
CEO Leon Farahnik said each of the buyers has business in plastics recycling and the facilities will remain in operation. The U.S. Bankruptcy Court in Delaware must still formally approve the sales.
Court documents and Farahnik said the facility in Riverside, Calif., will be sold to Houston-based private equity firm Sterling Group LP for $57.5 million.
Riverside was CarbonLite's first plant, opening in 2012. Sterling has owned a variety of plastics assets, and in 2019, bought Ohio-based PET recycler and strapping maker Polychem Corp.
The company's Dallas plant is being sold to global resin maker Indorama Ventures Public Co. Ltd., for $63 million, Farahnik said in a May 26 interview.
The Bangkok-based virgin PET maker has been investing in recycling operations globally. In 2019, it bought Custom Polymers PET LLC in Athens, Ala.
CarbonLite's newest plant, in Reading, Pa., is being sold to PET resin maker DAK Americas LLC, which is part of Alfa SAB de CV of Monterrey, Mexico. The Reading plant started operating in late 2020.
DAK and Alfa have PET recycling plants in Richmond, Ind., and Argentina. It's paying $96 million for the Pennsylvania facility.
Farahnik said he was glad the plants will remain with companies in the recycling business.
"It's in the hands of a very good group of companies and the employees are all employed," he said. "The plants are running … and continue to supply their customers."
But he said he believes large consumer product makers and retailers must provide more support for recycled content purchasing or the recycling industry will remain difficult in the long term.
In its bankruptcy filing, the company said it had incurred heavy capital expenses in building the $80 million facility in Reading and expanding its Dallas operations shortly before COVID-19 lockdowns, and it said the pandemic added to its challenges.
"Recycling needs attention and financial support to be successful in the U.S.," Farahnik said. "Nobody has made money in recycling. Everybody has taken losses and tried to stay afloat."
Farahnik said negotiations continue over the fate of the company's Pinnpack Packaging subsidiary.