Filing: Firm planning Mo. project short on cash
Tuesday, September 20, 2011
COLUMBIA, Mo. (AP) — A recent disclosure shows that a company trying to receive state and local incentives for manufacturing an artificial sweetener in central Missouri has little cash.
Mamtek U.S. Inc. has planned to produce the calorie-free sweetener sucralose in Moberly. The city issued $39 million in industrial bonds for the project, the state offered more than $17 million worth of incentives and the deal called for an $8 million private investment.
The Columbia Daily Tribune reported Monday that a filing from UMB Bank, the trustee for the bonds, indicated that Mamtek representatives had told the bank that the company is “severely financially distressed and has very little cash.” According to that filing, company representatives also had said they think the project is viable but would cost $20 million to $44.5 million to complete and that the company had said it thinks certain intellectual property escrowed for the project has very little value.
Mamtek missed its first bond payment, and the newspaper (http://bit.ly/mWHoJd) reported that the company has laid off four people it had hired in central Missouri.
Peter Kravitz, who became the president of Mamtek after the bond payment had been missed, confirmed Monday to the AP that the company has little cash. Kravitz said he could not comment about the estimate for completing the project or about the value of intellectual property. Kravitz is an attorney and focuses on restructuring companies.
Last week, the Moberly Area Economic Development Corporation said officials had been notified that the bond payment was missed. The development corporation said in its statement that money was used from a reserve fund to pay bondholders and that there is sufficient money in the reserves to make the next scheduled bond payment.
Corey Mehaffy, the executive director for the Moberly Area Economic Development Corp., did not immediately return a call Monday from The Associated Press seeking comment.
The Missouri Department of Economic Development has said the state incentives for the project in Moberly are performance-based and that none had gone out to the company.
Gov. Jay Nixon last year traveled to Moberly to announce that Mamtek was planning a plant in the central Missouri city about 30 miles north of Columbia. Nixon said it could be a significant boost for the state’s economy and that he was pleased his administration could provide an incentives package for it.
State records show Mamtek planned to expand the Moberly plant in phases. Under the first phase, 50 jobs would be created initially with an additional 111 new jobs created one month later. Within two years, the plan called for 312 new jobs to be created at the facility. The average starting wage for the new jobs would be $35,000.
Information from: Columbia Daily Tribune, http://www.columbiatribune.com