A Canadian aluminum trader that had been struggling to restructure its debt has filed
bankruptcy
in the U.S. and Canada, saying the American trade war helped push the company over the edge.
Sinobec Group Inc. arranges deals between sellers and buyers of
aluminum ingots
, as well as finished items like building products, shower doors and fences, the company said in court papers filed in federal court in Illinois on Tuesday.
For about two years, Sinobec had been working with lenders after defaulting on one of its loans, company owner and chief executive Zhong Li said in court papers. Sinobec eventually hired financial advisor Alvarez & Marsal to help refinance about US$103 million of debt, and lenders agreed to avoid taking action against the company.
Tariffs imposed in recent months by
U.S. President Donald Trump
hit Sinobec hard, the company said.
“This has exposed the debtors to the full impact of the trade war,” company restructuring advisor Philippe Jordan, with
PricewaterhouseCoopers
, said in court papers. “Significant accounts receivable collections have halted, as the supply chain upon which the debtors rely for payment has ground to a halt.”
Sinobec is one of the first companies to directly blame Trump’s trade war for contributing to its bankruptcy. Experts have been predicting a wave of restructurings will hit the US later this year, especially among retailers and importers that rely on Chinese manufacturers.
In April the president unilaterally imposed tariffs of 145 per cent on goods from China. Although he later lowered the duties to 45 per cent, the reduction did not help Sinobec because the cost “is still well above the market’s ability to absorb,” the company said in court papers.
Sinobec gets its aluminum from various countries, including China, Turkey and India. Most sales, however, are in North America, with more than 40 per cent of the company’s customers in the U.S., the company said.
Before filing for bankruptcy, the company had cut staff and reduced salaries. Sinobec employs 76 people at its headquarters in Montreal and in Florida. The company’s assets are worth about US$232 million, according to court papers.
The case is Sinobec Group Inc., 25-80689, US Bankruptcy Court for the Northern District of Illinois
With assistance from Mathieu Dion
Bloomberg.com
Canadian aluminum trader blames bankruptcy on trade war
2025-05-27 15:05:01
