January 10/Chicago/Chicago Tribune -- Chicago-based Merisant Worldwide Inc., maker of the artificial sweetener Equal, filed for Chapter 11 bankruptcy protection, hobbled by the global credit crisis and sliding sales.
Merisant, largely owned by private-equity firm Pegasus Capital Advisors, is saddled with $560.7 million in debt, compared with $331.1 million in assets, according to U.S. Bankruptcy Court filings in Delaware. Its biggest creditors are holders of its publicly traded bonds, who are owed $362 million.
Merisant was scheduled to make $78.3 million in debt payments in the 12 months ending September 30, according to a November filing with federal securities regulators. Some of those payments are due this month.
"It is fair to say the current turmoil in the credit markets made bank financing unavailable to Merisant to refinance its near-term maturities and interest payments," the company said in a statement to the Tribune.
Paul Block, Merisant's chief executive, said in a separate statement that "this is a financial restructuring of our balance sheet, not an operational restructuring of our business. We've already taken aggressive steps to cut costs."
No job cuts are expected because of the bankruptcy, he said. Merisant employs about 425 worldwide, including almost 70 in Chicago and 120 at a plant in Manteno, Ill.
Merisant is betting on future growth through PureVia, a zero-calorie natural sweetener derived from the leaves of the stevia shrub. Tabletop sweeteners under the PureVia brand are rolling out in stores nationwide.
Merisant also has partnered with PepsiCo, which plans on new beverages sweetened with PureVia. Block said the bankruptcy restructuring will free up more cash to support the expansion of PureVia.
From the January 19, 2009, Prepared Foods E-dition