The largest sugar company in the US has admitted that financial worries may lead it to seek protection under the US Bankruptcy Code, in a bid to buy time to sort itself out.
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Imperial Sugar has seen its profits slashed after a global sugar glut led to falling prices, and the situation came to head when it became apparent that there was no way it could afford an interest payment of US$12.2m due on 15 December, on US$250m in senior subordinated notes.
Bank lenders have agreed to waive the terms of its credit agreement until 8 January, and now CEO and president of the company, James Kempner, has revealed that a filing under Chapter 11 reorganization may be the only way Imperial Sugar can hope to undergo its restructuring plan over the next year.
The company is also in talks with note holders and bank lenders with a view to converting debt to stock.
Imperial’s common stock was suspended on the US Stock Exchange on 14 December, and it has yet to be resumed.
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