Beyond Meat’s shares took another hammering as the loss-making alt-protein maker launched a debt swap and equity exchange.
Investors will have the option of swapping existing zero percent convertible bonds due in 2027 into notes maturing in 2030 but carrying an interest rate of 7%, along with an exchange of up to circa 326 million in shares.
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In a statement yesterday (29 September), California-based Beyond Meat said the programme is aimed at eliminating more than $800m in debt. The exchange offer is open until 28 October.
Beyond Meat had $1.2bn of debt as of 28 June, according to its second-quarter results statement issued in August, when the company also announced the appointment of a chief transformation officer (CTO) on a temporary basis.
Volumes dropped across all the group’s sales channels in the first six months of fiscal 2025, most notably in US retail, while Beyond Meat reported yet another bottom-line net loss – $82.2m in the first half.
President and CEO Ethan Brown said yesterday: “As we continue our business transformation, we have simultaneously worked to strengthen our balance sheet and are today pleased to announce that we are launching an exchange offer for our existing convertible notes.
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By GlobalData“The exchange offer is intended to significantly reduce leverage and extend maturity, two outcomes that meaningfully support our long-term vision of being the global plant-protein company.”
Beyond Meat’s shares dived, however, falling 36% to $1.82 as of the close of trading in New York yesterday. The company has not reported a net profit since the business went public in 2019.
After repeated losses, falling revenues, an exit from China, job cuts and external financing, the shares have lost more than 52% this year and are a fraction of what they were at the timing of the IPO.
Meanwhile, Beyond Meat suggested yesterday that its debt-exchange offer was a step toward curtailing the risk of default as the company launched a simultaneous “consent solicitation” from holders of the 2027 notes.
It would aim to “adopt certain proposed amendments to the indenture”, which, Beyond Meat said, “would eliminate substantially all of the restrictive covenants in the existing convertible notes’ indenture, as well as certain events of default and related provisions applicable to the existing convertible notes”.
As of yesterday, Beyond Meat added that around 47% of existing note holders have supported the exchange offer and consent solicitation out of the required 85% to trigger the completion of the transaction.
John Boken at consultancy AlixPartners was assigned as Beyond Meat’s CTO in August.
His remit: to “more rapidly and aggressively reducing our operating expenses to fit anticipated near-term revenues; prioritising increased distribution of our core product lines; and investing in margin expansion initiatives across these core products”, Beyond Meat said.
Earlier this year, the company also revealed it had secured a $100m financing package from Unprocessed Foods, a unit of the non-profit Ahimsa Foundation, with an option to take a minority stake in Beyond Meat.
CEO Brown said at the halfway stage in August: “The company continues to experience an elevated level of uncertainty within its operating environment, which has, and management believes could continue to have, unforeseen impacts on the company’s actual realised results.”
