Covia filed for Chapter 11 protection in the United States
Covia Corporation, a NYSE listed company owned 65% by Sibelco, has filed for Chapter 11 protection in the United States. Upon emergence from the Chapter 11 process, Covia’s creditors would become the owners of a reorganised Covia.
The full statement by Covia can be found here.
The merger of Unimin and Fairmount Santrol and the creation of Covia was intended to give Sibelco greater strategic flexibility in the inherently volatile US energy market. Unforeseen structural changes to the proppant segment accelerated in the second half of 2018 with a surge of new capacity coming on stream and an industry-wide shift from Northern White sand to lower quality in-basin supplies. This has been compounded recently by the twin economic shocks brought about by the COVID pandemic and the collapse in the oil price. Despite the efforts of Covia’s management to combat these effects, it became clear in recent weeks and months that more radical steps were necessary.
Looking to the future, this situation presents Sibelco with a clearer path forward. Sibelco is debt-free and will now be able to concentrate 100% of its resources on growing its core business.
The priority of the Board of Directors and Sibelco’s management will be to focus on the performance of Sibelco’s core activities so that the company emerges from the current COVID downturn as a stronger, even more competitive and well diversified material solutions company.