Dive Brief:
- Renewcell has extended the deadline to March 28 for potential buyers to submit purchase offers, according to a press release posted on Friday, the original deadline.
- The extension follows Renewcell’s announcement that it would file for bankruptcy in February, when it failed to secure sufficient financing after a strategic review initiated in November last year.
- The new deadline will give the Sweden-based textile waste recycler time “to accommodate bids from several companies,” per the release. The company’s bankruptcy trustee — Lars-Henrik Andersson, a lawyer at Cirio Advokatbyrå — “anticipates a new owner will be secured in early April and will be announced shortly thereafter.”
Dive Insight:
It’s been a challenging time for struggling Circulose fiber manufacturer Renewcell, which saw several quarters of declining sales last year. Subsequently, the company repeatedly postponed its fiscal 2023 earnings release in February ahead of its bankruptcy filing.
Still, Renewcell isn’t without options.
After the company announced its strategic review process last year, short term funding in the form of loans from top shareholders H&M and textile developer Girindus’s incubator arm Girincubator helped Renewcell stay afloat. Andersson’s extension of the bidding deadline may indicate that there’s still industry interest in its offerings.
Meanwhile, H&M found a new textile recycling investment in Finland-based Infinited Fiber Company, which completed a two-part financing round totaling 40 million euros, or about $43.8 million at current exchange rates, last week. In addition to H&M Group, Infinited’s funding partners include Zara parent company Inditex and Adidas.
Infinited Fiber, which harvests cellulose from textile waste comprised of at least 88% cotton to make a proprietary fiber called Infinna, also has investments from companies including Bestseller, Zalando, VTT Ventures, Security Trading, Nidoco AB and TTY Management BV, an asset management firm owned by Tadashi Yanai, CEO of Uniqlo parent company Fast Retailing.
The recycled fiber field is still finding its footing. Fiber tech company Spinnova, which previously partnered with Renewcell, posted fiscal 2023 earnings that pointed to the sector’s continuing volatility. The Finland-based company’s revenue for the year was 10.6 million euros, down from 24.3 million euros year over year.
“The current tough economic climate is not the easiest for scaling a growth company,” Tuomas Oijala, who joined Spinnova as CEO in December, said in a statement. “...It is clear to me that macroeconomic trends, constraints in the global fibre supply chain, and the need for the textile industry to meet its sustainability targets present us with a significant and inspiring opportunity to capture.”
Oijala added that creating new textiles takes substantial resources.
“If the global textile industry wants to shift its material base from conventional materials, such as cotton and polyester, to more sustainable alternatives, we need all the players in the textile value chain on board,” he said. “Bringing a new material innovation like Spinnova to the market in larger volumes requires investments, incentives and long-term commitments from investors, textile industry players and policymakers.”
