Company director Stephen Frater confirmed that Rison had shut down operations for two days to resolve issues with its main lenders but said the company remains in business.
Republican-American had quoted an alleged email from Frater to his attorney saying: “We need some relief in the coming days or it’s over and we’ll read about it in the business section of every paper in the state if we file Chapter 11.”
However, Frater told CosmeticsDesign.com today that the company has “received some of the relief referred to in the email” and has no intention to file for bankruptcy.
The company is currently putting together a new financial package with existing lenders and outside investors to address issues that resulted in Sovereign Bank cutting off its line of credit.
Frater said Risdon had violated some financial ratio requirements with the bank but insisted that the real reason for the current difficulties was the credit crisis.
The company director said Sovereign has been looking to reduce its debt exposure and Risdon has worked hard to accommodate the bank's needs paying down more than half its debt in the last six months.
To secure Risdon’s financial health, he said the company would continue to generate cash internally by selling shares while looking to raise capital from alternative outside investors.
With a history that dates back over 90 years, Risdon is a major player in cosmetics packaging, supplying perfume and make-up packaging and components to leading brands including Estee Lauder, L’Oreal and Avon.
Frater said this specialist focus on cosmetics would serve the company well in the recession because the sector is relatively recession resistant.
He said customers have remained by their side and that even if Risdon may have to cut certain product lines and make some changes, it is well placed to ride out the current recession.
In an effort to become “the leading supplier” of cosmetic packaging components worldwide, Risdon made several acquisitions overseas in 2007.
Frater said “these are the low-cost manufacturing centers of the future” and that Risdon does not regret expanding abroad.
He said its Chinese plastics packaging operations have gone from start-up to profitability in a year with sales of more than $10m.
Difficulties sourcing aluminum of a suitable quality has stalled progress at its metal packaging plant in China but Frater said the company is confident of running more and more business through its overseas plants in the future.