Real Industry Inc (NASDAQ:RELY), a holding company with interests in Real Alloy Holding Inc. and its U.S. subsidiaries, filed a petition for voluntary Chapter 11 reorganization in the U.S. Bankruptcy Court for the District of Delaware. The Real Industry bankruptcy represents another business in the U.S. folding under the tough economic climate some companies are experiencing in 2017.
“During the Chapter 11 process, Real Alloy expects to conduct business as usual in the United States and worldwide and to continue to provide customers, suppliers and other business partners with the high level of service and performance they have come to expect from Real Alloy,” the company wrote in a press release.
Real Industry Inc has been granted continued use of its $110.0-million asset-based lending facility and up to $85.0 million of additional liquidity through debtor-in-possession financing, which will allow Real Alloy to continue to fund its operations. Real Alloy focuses on aluminum recycling.
The company’s business in the U.S. has been heavily impacted by a lack of liquidity last year, which delayed its ability to refinance or expand its borrowing capacity.
Much of management will remain in place during the proceedings.
Despite a recent spike on the market, the Real Industry bankruptcy has been a long time coming, if you look at the RELY stock value.
The company surged 45% following the bankruptcy filing, but that hardly made a dent in the over-91% fall that the stock has experienced since the beginning of the year, including the recent jump.
The company has been on a steady downward trajectory since 2015, when it first became publicly traded.
Real Industry Inc must now navigate the difficult process of reorganization and bankruptcy, with little certainty regarding its future.
“Real Industry and Real Alloy’s U.S. Operations Initiate Chapter 11 Proceedings,” Real Industry Inc, November 17, 2017.