US-based custom foodservice manufacturer CTI Foods has filed for reorganisation under Chapter 11 of the United States Bankruptcy Code in the District of Delaware in a move to implement its restructuring plan.
With support from its major stakeholders, the company also submitted a pre-packaged reorganisation plan along with bankruptcy filing.
The company has signed an agreement with the majority of its lenders on a comprehensive balance sheet restructuring in an effort to reduce its debt by more than $400m.
This agreement will allow the company to achieve significant financial flexibility to support continued investments for its customers.
In addition, CTI Foods has received commitments for $155m in debtor-in-possession (DIP) financing from its lenders.
If approved by the court, the company will use the financing to pay down existing debt and fund ongoing operations during the Chapter 11 cases.
CTI president and CEO Mike Buccheri said: “With the support of our lenders and equity sponsors, we are taking this positive and strategic step forward that will allow us to improve our capital structure and reduce our debt on an expedited basis while continuing to provide customers the custom food solutions and services they expect from CTI.
“With increased financial flexibility, we will be able to continue taking actions to best position CTI for long-term growth with both existing and new customers.
“It is a testament to the hard work of our employees and commitment to our customers’ success that many of our largest customers are not only standing by us through this process, but are also increasing their business. We are confident in the future of CTI, and believe this process will enhance our ability to drive value for all of our stakeholders.”
The foodservice distributor stated that it will continue to operate business throughout the restructuring process and possesses sufficient liquidity to meet all of its obligations.
It will also continue to fulfil customers’ orders suing facilities and distribution centres.