Merisant Worldwide files for Chapter 11

by Jeff Gelski
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CHICAGO — Merisant Worldwide, Inc. filed for Chapter 11 bankruptcy Jan. 9 in the U.S. Bankruptcy Court, District of Delaware. The company also said its financial situation may constrain its ability to market PureVia, a new all-natural, low-calorie sweetener featuring an extract of the stevia plant.

In its bankruptcy filing, Chicago-based Merisant Worldwide said it had between 50 to 99 creditors. As of Nov. 30, 2008, Merisant Worldwide had assets of about $331.1 million and total debts of about $560.7 million.

Merisant Worldwide Inc. is the parent company for Merisant Co., Merisant Foreign Holdings I, Inc., Merisant US, Inc., Whole Earth Sweetener Co. L.L.C., and Whole Earth Foreign Holdings L.L.C. All are listed as debtors in the filing.

The development of new products under the company’s Equal and Canderel brands may help to stabilize the business while PureVia and other all-natural sweeteners and sweetened food products from Whole Earth Sweetener Co. may present growth opportunities, according to Merisant Worldwide.

PureVia features Rebaudioside A extracted from the stevia plant. The Food and Drug Administration in December said it had no objections to scientific studies showing Rebaudioside A was Generally Recognized As Safe (GRAS) for use as a sweetener in certain foods and beverages.

"However, we may be constrained in our ability to realize fully the value of these new products as a result of our current capital structure," Merisant Worldwide said in the filing. "The successful launch of new products and marketing of our core brands requires capital, and we must use a significant portion of our cash flows from operations to service our outstanding debt.

"We had an aggregate of $553.6 million of short and long-term debt outstanding as of Sept. 30, 2008, including capital lease obligations and borrowings from Merisant’s revolving credit facility."

Merisant Worldwide said it is in discussions with certain secured lenders, debt security holders and potential financing sources about refinancing or restructuring all or a portion of its debt obligations.

"However, there can be no assurance that we will be able to refinance, replace or amend our outstanding debt obligations on terms favorable to us, or at all, particularly given current financial market conditions," Merisant Worldwide said in the filing.

Merisant Worldwide estimated on Dec. 31, 2007, it had a 22% dollar share in the global market for low-calorie tabletop sweeteners. The company said in recent years it has faced significant competition from McNeil Nutritionals, L.L.C., a subsidiary of Johnson & Johnson that markets and distributes the artificial low-calorie sweetener Splenda.

Merisant Worldwide has retained the law firms of Chicago-based Sidley Austin LLP and Wilmington, Del.-based Young Conaway Stargatt & Taylor, LLP. The company has retained New York-based Blackstone Advisory Services LP as financial advisers.

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