Shares in Hain Celestial plummeted in US trading yesterday in the wake of a report that suggested the group is sizing up potential Chapter 11 protection.
The Greek Gods yogurt maker is considering filing for bankruptcy, "people familiar with the matter" told Bloomberg yesterday (15 October).
According to the unnamed sources, the business could look for court protection "as soon as next month", though a final decision has not been reached and "the plan could still change", the publication reported.
The company's share price tumbled more than 50% by the close of trading in New York.
"Over the last several months, we have been advancing a turnaround strategy focused on strengthening our capital structure, simplifying our portfolio and improving execution across the business,” a company spokesperson said in a statement to Bloomberg.
“As part of that work, the board and management team continue to evaluate a range of strategic and financial alternatives to maximise value for all stakeholders.”
The spokesperson also told the publication Hain Celestial does not comment "on speculation regarding specific potential outcomes".
Just Food has approached the Earth’s Best brand owner outside of US working hours today.
In September, Hain Celestial revealed it had agreed to offload its “international” operations to global private equity firm Aurelius for $323m in cash.
A filing from Hain Celestial made with the US SEC yesterday suggested the sale of its international assets has so far not met necessary conditions.
The transaction was dependent on "the company and its lenders entering into an amendment of the company’s credit agreement" by 12 October. According to the filing "that condition was not satisfied".
Hain has been in talks with the private-equity group, "and continues to pursue a path forward for completing the international business transaction", the filing said.
"The company also remains in discussions with its lenders regarding its capital structure and continues to evaluate and pursue all available paths."
Ella’s Kitchen baby and kids foods, the Joya and Natumi plant-based beverage lines and Hartley’s jelly were among the brands set for sale to Aurelius.
The international unit has operations in the UK, Ireland and mainland Europe.
Brands Hain is due to retain following the sale include Celestial Seasonings teas, Greek Gods yogurt and the Earth’s Best organic brand under which the company produces tea, yogurt, and baby and kids foods.
Hain is also due to keep Spectrum Organic cooking oils, MaraNatha nut butters and Imagine broths.
The sale followed a review of the group's portfolio initiated by president and CEO Alison Lewis last year, which already brought about the sale of its North American snacks business earlier this year to Canada’s Snackruptors.
