US dried pasta maker New World Pasta has announced today that it has filed a voluntary petition seeking reorganisation under Chapter 11 of the US Bankruptcy Code.
The filing in the US Bankruptcy Court for the Middle District of Pennsylvania will enable the company to operate under the protection of the court while it reorganises and reduces its debt, strengthens its financial position and restructures its balance sheet. The company also announced that it has obtained a commitment for US$45m financing facility from a financing group led by one of its current banks.
New World Pasta said it is conducting business as usual in the US, and its subsidiaries in Canada and Italy are not part of the Chapter 11 filing.
New World Pasta, whose brands include Ronzoni, San Giorgio and Prince, has had financial difficulties for some time. Its mounting debts were not helped by a decline in sales due to the popularity of low-carbohydrate diets in the US.