Planet Organic has announced the sale of its vitamin manufacturing business and six of its Healthy’s retail locations in order to reduce debt.
The Canadian natural products group sold its Trophic Vitamin Division to health and nutrition group Atrium Innovations for C$10.6m (US$10.5m).
It also entered into an agreement to sell six Healthy’s health food stores in Ontario to Good Health Mart for an undisclosed sum.
The sale proceeds will be used to reduce corporate debt, the company said.
However, the corporation emphasised that it remains in default under its credit facilities. Lenders therefore have the legal right to demand repayment of all indebtedness and enforce their security over all of the group’s assets.
To date, Planet Organic has failed to secure financing from other sources to meet its obligations to existing lenders.
Planet Organic said that it continues to review “all strategic options” to further reduce its borrowing levels.
“The sale of our Trophic Division to Atrium is a positive step towards completing the corporation restructuring we initiated six months ago,” EVP Darren Krissie said.