Swedish textile recycler Re:NewCell AB announced on Sunday that it would file for bankruptcy. The company was unable to secure the necessary funds to successfully complete a financial realignment announced in November, it said in a statement.
The company, which had invested heavily in expanding its production capacity in recent years, ran into financial difficulties last fall due to unexpectedly low demand for its fibers made from recycled textile waste.
Negotiations about a long-term financing solution remain unsuccessful
Shortly before Christmas, the company was able to secure short-term support. The subsequent negotiations on a long-term financing solution with the two most important shareholders H&M and Girindus, the creditor banks and potential new investors were well advanced, but did not lead to a solution to provide the company with capital and liquidity to the extent that Renewcell now announced that it would have been necessary to continue business operations.
Chairman Michael Berg was deeply disappointed by the latest developments: “This is a sad day for the environment, our employees, shareholders and other stakeholders, and it is evidence of the lack of leadership in the fashion industry and the necessary pace of change is missing,” he explained in a statement.