NEW YORK, March 17 (Reuters) – The Lycra Company, a manufacturer of spandex and other stretchy fabrics, filed for bankruptcy protection in Houston, Texas, on Tuesday, seeking to free itself from $1.2 billion in debt.
The company’s creditors have agreed to provide $75 million in new financing and eliminate most of the company’s $1.53 billion in existing debt, according to court records. The company said the restructuring will not affect its manufacturing operations, customers, suppliers or employees.
Lycra said it has almost unanimous support from its creditors for a restructuring and expects to exit the recovery process within 45 days.
Lycra Company, based in Wilmington, Delaware, had been overwhelmed for years following a 2019 acquisition by Chinese textile company Ruyi Textile and Fashion International Group Limited, according to court records.
Lenders took over the business in 2022 after the company defaulted on its debt, but the company continued to underperform due to decreased demand, increased competition from lower-priced generic spandex products, unpredictable U.S. tariffs and persistent legal disputes with its former owners in China, according to the company.
The company, founded in 1958 as part of DuPont, was the original producer of spandex and remains one of the world’s leaders in innovation in the sector, according to the company. The company has eight factories, three research laboratories and 11 offices in North America, Europe, Asia and South America, with 2,000 employees worldwide.
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