Snack Maker Hearthside Mulls Creditor Takeover in Bankruptcy

(Bloomberg) — Hearthside Food Solutions’ private equity owners are preparing to hand control to creditors, potentially as part of a bankruptcy filing, according to people with knowledge of the plans. 

The snack maker, which has been running out of room to repay its buyout debt after years of poor earnings, is in talks with creditors over a deal that would be carried out either in Chapter 11 or outside of the courtroom, said the people, who asked not to be named discussing private plans. 

No final decision has been made and negotiations are continuing. Hearthside has about $2 billion of debt due May of 2025, and has to repay what it borrowed from a credit facility next month. 

The company, run by a series of different private equity firms over the past decade, has been consistently burning cash since its latest buyout in 2018 by Boston-based Charlesbank Capital Partners and Zug, Switzerland-based Partners Group, according to a June report by S&P. Representatives for Hearthside and Partners Group declined to comment on the plans, while messages left with Charlesbank were not returned.  

Even after it sold assets including real estate, derivatives and certain European operations over the past year, Hearthside was left with dwindling liquidity and doubt about its ability to continue as a going concern by the time it announced its second-quarter results, according to some of the people.

Hearthside was named last year in a New York Times report that said the processor employed migrant children in plants in Grand Rapids, Michigan for work tending ovens to make Chewy and Nature Valley granola bars and moving heavy pallets of Lucky Charms cereal, among other jobs, all in violation of child labor laws. 

Company representatives didn’t comment to Bloomberg about that report, but Hearthside said in a statement published in Crain’s Grand Rapids Business in 2023 it has a strict policy against employing people under the age of 18, either directly or through agencies, and has changed procedures to ensure its policy isn’t broken again. It said it hired advisory firm KPMG LLP and law firm Paul Weiss, Rifkind Wharton & Garrison to review its practices. 

Hearthside’s roughly $1 billion term loan due in 2025 is quoted around 73.75 cents on the dollar, according to data compiled by Bloomberg, which also shows it has a $300 million second-lien term loan due November of that year.  

The company also produces snacks like protein bars and crackers, according to its website, as well as fresh and frozen foods. 

More stories like this are available on bloomberg.com

Spread the love

Aniket Pujari

Aniket Pujari is a visionary entrepreneur and dedicated content creator who has made significant contributions to the digital media landscape. As the founder of Minute To Know News, he has established himself as a leading figure in the world of finance, cryptocurrencies, and Internet-related topics.

Related Posts

Indian stock market’s consecutive slides drive netizens to post memes on social media; check out here

The Indian stock market closed in the red on Thursday, November 14, for the sixth consecutive day. The decline slowed down, as heavyweight stocks like Reliance Industries and HDFC Bank…

Spread the love

Happy Guru Nanak Jayanti 2024: Top wishes, quotes, WhatsApp status to share on Gurpurab with family and friends

Guru Nanak Jayanti 2024: Guru Nanak Jayanti, also known as Gurpurab, is celebrated to mark the birth anniversary of Guru Nanak Dev, the first guru and the founder of the…

Spread the love

Leave a Reply

Your email address will not be published. Required fields are marked *

You Missed

Pepe Unchained Presale Passes $29 Million with Just 29 Days Left Before Possible Tier 1 Listings

Pepe Unchained Presale Passes $29 Million with Just 29 Days Left Before Possible Tier 1 Listings

Indian stock market’s consecutive slides drive netizens to post memes on social media; check out here

Indian stock market’s consecutive slides drive netizens to post memes on social media; check out here

Happy Guru Nanak Jayanti 2024: Top wishes, quotes, WhatsApp status to share on Gurpurab with family and friends

Happy Guru Nanak Jayanti 2024: Top wishes, quotes, WhatsApp status to share on Gurpurab with family and friends

Ethereum whale sets ETH price target for $10k; points to RCO Finance for a 12,102% rally

Ethereum whale sets ETH price target for $10k; points to RCO Finance for a 12,102% rally

Narayana Murthy says PM Modi should see if India needs more managers than administrators in govt

Narayana Murthy says PM Modi should see if India needs more managers than administrators in govt

India third most improving market in business climate, says IU

India third most improving market in business climate, says IU