Chicago-based Merisant Worldwide Inc., maker of tabletop sweeteners Equal and Canderel, filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware to restructure its balance sheet and strengthen its financial health and long-term growth prospects. Meanwhile, the company's U.S. and global businesses will continue normal operations.
"During this restructuring, we will continue to support our current brands and launch PureVia, our exciting all-natural, zero-calorie sweetener, in partnership with PepsiCo, as well as advance our plans to introduce natural sweeteners in other markets,” said Paul Block, chairman and CEO. “On December 17, Reb A, the stevia-based extract that sweetens PureVia, became the first stevia extract to receive generally recognized as safe (GRAS) status from the FDA, and we've seen tremendous interest in PureVia in response to that news."
Merisant has secured a $20 million debtor-in-possession (DIP) financing facility from Wayzata Investment Partners in order to ensure that it has adequate liquidity to operate while it restructures its debt. Furthermore, the company announced that as part of the DIP financing it is working on a consensual basis with the majority holder of its 91/2% Senior Subordinated Notes on a plan of reorganization that, if approved by the Bankruptcy Court, would significantly deleverage the company's balance sheet. The Blackstone Group and Sidley Austin LLP represent the company as financial adviser and outside legal counsel, respectively.
According to Moody's Investors Service Merisant sales were some $277 million for the 12 months ended September 30, 2008, according to Moody’s Investor Service. Global competition from sucralose sweetener brand Splenda, from a subsidiary of Johnson & Johnson, has eaten into Merisant’s sales, but Moody’s added that Merisant does have growth prospects with PureVia.
"I want to assure our customers, vendors and employees that this restructuring will not disrupt daily operations -- our U.S. and global businesses will function normally throughout this process,” said Block. “Simply put, this balance sheet restructuring is about reducing the company's debt, not disposing assets, reducing the workforce or reconfiguring our operations."
