Dive Brief:
- The U.S. Bankruptcy Court for the Southern District of Texas has approved a restructuring plan for Instant Brands, the company announced Thursday. Under the plan, the company will reorganize its housewares business under new lender-controlled ownership. As part of the restructuring, Instant Brands’ lenders will offer financing to exit bankruptcy.
- Instant Brands sold its appliance business to private equity firm Centre Lane Partners in November.
- Instant Brands filed for Chapter 11 in June, citing macroeconomic conditions beyond its control, specifically the pandemic and global supply chain issues. The company’s debt had reached $512 million at that time, according to court documents. The company expects to exit Chapter 11 by the end of this month.
Dive Insight:
Instant Brands in August received an additional $30 million in new term loan financing from its lenders. That increased the amount of its term loan credit facility to $162.5 million.
Instant Brands’ reorganization plan also provides a framework for a significant reduction of the company’s pre-bankruptcy indebtedness, according to court documents. Those moves will position Instant Brands for long-term success, the company said.
The financial terms of the plan include the equitization of over $390 million of prepetition term loan claims into 100% of the new equity interests. Upon emerging from Chapter 11, court documents indicate that Instant Brands’ reorganized capital structure will consist of up to $210 million in aggregate principal amount of the exit financing and 100% of new equity interests issued in book entry form and distributed to the holders of prepetition term loan claims.
“We are pleased to have reached this important milestone, bringing Instant Brands' housewares business another step closer to new ownership and a return to a properly funded capital structure that will enable the company's continued success,” Ben Gadbois, president and CEO of Instant Brands, said in a statement.
Illinois-based Instant Brands employs about 1,800 and also operates in Canada, Singapore, England, South Korea, Taiwan and China. The businesses outside the U.S. were not part of last summer’s bankruptcy case.
“Our partners around the world will be able to continue working with our housewares business that is moving forward with a significantly improved capital structure and is positioned to drive sustained growth and profitability on a global scale,” Gadbois said.
