Shares in tableware manufacturer Libbey Inc. plunged to a historic low as the firm continued to fight financial losses and shareholder resistance to the buy-out of its Mexican joint-venture partner.
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Shares in tableware manufacturer Libbey Inc. plunged to a historic low as the firm continued to fight financial losses and shareholder resistance to the buy-out of its Mexican joint-venture partner. Libbey“s share price, which was over USD 40 four years ago, has fall 65% in the last 12 months. It closed 20 March 2006 at USD 7.85 on the New York Stock Exchange, down USD 0.09 cents from 17 March 2006 but up from a record low of USD 7.82 reached during the day“s trading. Early in 2005, as Libbey“s stock was near USD 25 a share, executives estimated the company would have earnings before special items of USD 1.79 to USD 1.89 a share for 2005. Natural-gas prices, other high raw-material costs, and financial difficulties in its Mexican glass joint venture cut that amount, causing disillusionment among investors, said analyst James Barrett of C.L. King & Associates Inc. “They ended up a year later making USD 0.08 in 2005,” he said of earnings before special charges. “That“s certainly the main reason the stock is down”. Investors also are worried that by buying Vitro SA“s 51% stake in Vitrocrisa SA, Libbey may take on too much debt, Mr. Barrett said. The Toledo, Ohio-based firm, which had 2005 sales of USD 568 million and a net loss of USD 19.4 million, had borrowings of USD 262 million at the end of 2005. Libbey plans to refinance substantially all its debt in the 1H of 2006, which will help it pursue a potential Vitrocrisa buyout and other strategic moves, the company said in mid-March 2006 in a filing with the US Securities and Exchange Commission.