The Swedish textile fibre recycler Renewcell has announced that it will file for bankruptcy. The necessary application would be submitted to the Stockholm District Court, the company announced following the board of directors' decision on Sunday. The company "has not been able to secure sufficient financing to be able to complete the strategic review, announced on 20 November 2023, with a satisfactory result", according to the statement.
In January, the fibre recycler announced plans to restructure the business and to enter into negotiations with affected trade unions. The restructuring was to reduce the workforce by around 25 per cent, or just over 30 people.
As part of the strategic review, Renewcell had been in advanced negotiations regarding long-term financial solutions with its two largest shareholders, H&M and Girindus, and its existing lenders BNP Paribas, European Investment Bank (EIB), Finnvera (as partial guarantor), Nordea and AB Svensk Exportkredit, as well as with potential new investors and other stakeholders. "Unfortunately, it is now clear that these discussions have not led to a solution that will provide Renewcell with the necessary liquidity and capital to ensure its operations going forward," the company said on Sunday.
"As we have a strong belief in the company's long-term potential, we have together with our advisors spent very substantial time and efforts in trying to secure the necessary liquidity, capital and ownership structure for the company to secure its future," said Renewcell's board chairman Michael Berg.
Despite "intense dialogues with both current main owners, new investors and our banks, as well as other stakeholders", the discussions had not been successful, said Mr Berg, calling it "a sad day for the environment, our employees, our shareholders, and our other stakeholders, and it is a testament to the lack of leadership and necessary pace of change in the fashion industry".
Update: On the afternoon of 27 February, Renewcell announced that the Stockholm District Court had approved its application and had declared the company bankrupt. The appointed bankruptcy trustee is Lars-Henrik Andersson at the law firm Cirio Advokatbyrå.
Renewcell developed a technology to recycle cotton and cellulosic textile waste and supply the fibre back to the textile industry, opening a demonstration plant in Kristinehamn, Sweden in 2017. The commercial-scale operations it established later are located in Sundsvall, in SCA's former publication paper production plant at the Ortviken industrial site. SCA continues to produce chemically pretreated thermomechanical pulp (CTMP) at the site.
The textile fibre recycling facility has a processing capacity of up to 60,000 tonnes per year of "Circulose" pulp for use in textiles production. Late last year, it was still producing only around 1,400 tonnes of material per month.
Renewcell's sales volumes were also below expectations. In fact, in November, no recycled dissolving pulp was delivered to customers. Late in 2023, Renewcell announced that it had secured additional short-term loans that would keep it afloat for the coming months. The company had also intensified efforts to increase sales to customers, including H&M.
