CTI Foods has reached an agreement with the majority of its lenders on a comprehensive balance sheet restructuring that will reduce its debt by more than $400 million, providing significant financial flexibility to support continued investments by the company. To implement the restructuring plan, CTI filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the District of Delaware along with a pre-packaged plan of reorganization with the support of its major stakeholders.
The company has sufficient liquidity to meet all of its obligations and will continue to operate its business as usual throughout the resturcturing process. CTI's facilities and distribution centers are open and fulfilling orders and has been working with key vendors and manufacturing partners to help ensure that products will continue to be delivered to customers on time.
“With the support of our lenders and equity sponsors, we are taking this positive and strategic step forward that will allow us to improve our capital structure and reduce our debt on an expedited basis while continuing to provide customers the custom food solutions and services they expect from CTI,” says Mike Buccheri, President and Chief Executive Officer of CTI. “With increased financial flexibility, we will be able to continue taking actions to best position CTI for long-term growth with both existing and new customers. It is a testament to the hard work of our employees and commitment to our customers’ success that many of our largest customers are not only standing by us through this process, but are also increasing their business. We are confident in the future of CTI, and believe this process will enhance our ability to drive value for all of our stakeholders.”
In conjunction with the restructuring plan, CTI has received commitments for $155 million in debtor-in-possession (“DIP”) financing from its lenders, which, subject to Court approval, will be used to pay down existing debt and fund ongoing operations during the Chapter 11 cases.
CTI has filed a number of customary motions with the Bankruptcy Court seeking authorization to support its operations during the financial restructuring process, including authority to continue to pay employee wages and provide health and other benefits, and to pay vendors and manufacturing partners in full for all goods and services provided. The Company expects to receive Bankruptcy Court approval for these requests.