Troubles are mounting for PET depolymerization startup Loop Industries. It has lost a key supply contract and also faces lawsuits and an investigation by regulators.<\/p>\n
The publicly traded, Quebec-based company is commercializing a low-heat, pressureless process to break down PET into monoethylene glycol (MEG) and dimethyl terephthalate (DMT), which can be used to make new PET.<\/p>\n
Coca-Cola Cross Enterprise Procurement Group (CEPG), which helps Coca-Cola bottlers source materials for packaging, on Oct. 29 sent Loop a notice that the company plans to terminate its 2018 agreement with Loop effective Dec. 14. The five-year agreement allowed bottler members of CEPG to buy RPET produced via Loop\u2019s technology at an Indorama Ventures plant in South Carolina.<\/p>\n
In 2018, Loop signed an agreement with Indorama Ventures, the world\u2019s largest PET producer, to build a joint-venture depolymerization facility at Indorama\u2019s Spartanburg, S.C. PET plant. That chemical recycling unit has not yet been built.<\/p>\n
According to Loop\u2019s Nov. 4 disclosure about the termination, CEPG said it was canceling the deal because Loop didn\u2019t meet its first production milestone at the joint venture facility by July 2020, as required by the agreement. Loop said the project has been delayed by the COVID-19 pandemic and the continued U.S.-Canada border closures and quarantine requirements.<\/p>\n
\u201cCEPG indicated in the Notice that it is open and interested in exploring a new framework agreement with the Company for North America and\/or Europe,\u201d Loop wrote.<\/p>\n
Potential legal troubles
\nThe contract loss comes after Hindenburg Research issued a report leveling a number of allegations against the company, calling it a \u201csmoke and mirrors show.\u201d Hindenburg had or has a short position on Loop, meaning it stands to make money if Loop\u2019s stock value decreases. Indeed, Loop\u2019s stock price collapsed after the report came out, erasing pricing gains from late summer and early fall.<\/p>\n
Loop immediately denied the allegations by Hindenburg Research, saying the report \u201ccontained factual inaccuracies.\u201d<\/p>\n
After the report, the U.S. Securities and Exchange Commission (SEC) issued an Oct. 15 subpoena for Loop\u2019s records. According to Loop\u2019s Oct. 16 disclosure of the subpoena, \u201cthe SEC informed the Company that its investigation does not mean that the SEC has concluded that anyone has violated the law and that the investigation does not mean that the SEC has a negative opinion of the Company.\u201d Loop\u2019s stock price dropped again after the disclosure.<\/p>\n
Additionally, Loop noted that, on Oct. 13, the company and some of its officers had been named as defendants in two lawsuits filed on behalf of shareholders: One in U.S. District Court for the Southern District of New York and the other in the Superior Court of Qu\u00e9bec, District of Terrebonne.<\/p>\n
This isn\u2019t the first time the company has faced allegations in court. In Feb. 2019, the startup announced the settlement of a lawsuit alleging that Loop CEO Daniel Solomita reneged on a verbal deal with two men to sell them Loop stock at a certain price. The company said it denied the allegations but decided to settle the case to avoid the burden, expense, risk, inconvenience and distraction of continued litigation.<\/p>\n
In addition to Coca-Cola, Loop has signed agreements to supply RPET to PepsiCo, Danone and L\u2019Or\u00e9al.<\/p>\n
Those companies recently cited their agreements with Loop as some of the steps they\u2019re taking to boost recycled content in their plastic packaging. According to the Ellen MacArthur Foundation\u2019s recent progress report for its New Plastics Economy Global Commitment, PepsiCo said it will continue to engage with partners like Loop \u201cto allow for a greater supply of recycled content in the future.\u201d L\u2019Or\u00e9al also cited its agreement with Loop \u201cto encourage chemical recycling of PET.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Troubles are mounting for PET depolymerization startup Loop Industries. It has lost a key supply contract and also faces lawsuits and an investigation by regulators. The publicly traded, Quebec-based company is commercializing a low-heat, pressureless process to break down PET into monoethylene glycol (MEG) and dimethyl terephthalate (DMT), which can be used to make new […]<\/p>\n","protected":false},"author":59,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","nova_meta_subtitle":"","footnotes":""},"categories":[17143],"tags":[10416,7105,11966,10453],"supplier":[1245,17538],"class_list":["post-81884","post","type-post","status-publish","format-standard","hentry","category-recycling","tag-circulareconomy","tag-packaging","tag-plastics","tag-recycling","supplier-coca-cola-co","supplier-loop"],"_links":{"self":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/81884","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/comments?post=81884"}],"version-history":[{"count":0,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/81884\/revisions"}],"wp:attachment":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/media?parent=81884"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/categories?post=81884"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/tags?post=81884"},{"taxonomy":"supplier","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/supplier?post=81884"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}