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Restructuring

Bumble Bee Foods Swims Into Ch. 11

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Published: November 26th, 2019
The San Diego-based canned seafood producer plans to sell its assets to Taiwanese tuna supplier FCF, a creditor and minority shareholder, for $930.6 million.

Canned seafood producer Bumble Bee Foods LLC has filed for Chapter 11 protection with plans to sell substantially all of its assets to trade creditor and shareholder FCF Co. Ltd. for $930.6 million.

The San Diego debtor and four affiliates on Thursday, Nov. 21, submitted petitions in the U.S. Bankruptcy Court for the District of Delaware in Wilmington.

Although Bumble Bee had not filed a bidding procedures motion as of Thursday afternoon, it indicated in a Thursday statement that FCF would serve as its stalking-horse bidder. Court papers show FCF has a $50.5 million trade claim. It would pay $275 million in cash, assume the $17 million due for a Department of Justice fine and roll over up to $638.6 million in term loan debt.

Taiwan-based FCF supplies nearly all of Bumble Bee’s albacore tuna and much of its skipjack, yellowfin and bigeye tuna. It also is a minority shareholder in the debtor.

Bumble Bee expects to close a sale within 60 to 90 days, the statement said.

To fund the case, it looks to tap up to $280 million in debtor-in-possession financing from prepetition lenders — a first-priority $80 million term loan from administrative agent Brookfield Principal Credit LLC and a junior-priority $200 million asset-based revolving credit facility from lenders including administrative agent Wells Fargo Capital Finance LLC.

Judge Laurie Selber Silverstein is set on Friday morning to consider first-day motions, including requests for joint administration of the cases; interim use of the DIP; payment of employee wages, salaries and other compensation; and payment of critical vendors. Bumble Bee Parent Inc. is the proposed lead debtor in the case.

According to a declaration from CFO Kent McNeil, Bumble Bee has recently faced financial distress from factors including a $25 million criminal fine in 2017 from the DOJ related to alleged price-fixing and civil suits related to the price-fixing allegations, which resulted in high defense costs. The debtor’s financial problems led it to obtain waivers under its term loan agreement to avoid a default this spring and to launch a review of strategic alternatives.

Founded in 1910 as Columbia River Packers Association, the debtor became Bumble Bee Seafoods Inc. in 1960 after Hawaii-based Castle & Cooke Inc. purchased majority ownership in the company. The company had had many subsequent ownership changes and was purchased in 2010 by a fund managed by Lion Capital LLP. A proposed $1.5 billion merger with Thai Union Group PCL, owner of rival tuna brand Chicken of the Sea, fell apart in December 2015 amid resistance from the DOJ.

Bumble Bee produces seafood and specialty protein products under the Bumble Bee, Snow’s, Brunswick, Wild Selections and Beach Cliff brand names. Canadian affiliates including Connors Bros. Clover Leaf Seafoods Co. produce shelf-stable seafood products under the Clover Leaf, Brunswick and Wild Selections names, and Bumble Bee’s international business distributes products under the Brunswick, Bumble Bee and Beach Cliff marks to over 40 markets and countries, including Barbados, Jamaica and Trinidad & Tobago.

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