Merisant receives $20 million DIP financing commitment, working with noteholders on plan

By Caroline Salls

Pittsburgh, Jan. 12 - Merisant Worldwide, Inc. has obtained a commitment for $20 million in debtor-in-possession financing from Wayzata Investment Partners, according to a company news release.

The company said the DIP financing will ensure that it has enough liquidity to operate while it restructures its debt.

Merisant is seeking interim access to $4 million of the DIP financing.

The facility will mature on the earliest of seven months from the bankruptcy filing date, on the effective date of a plan of reorganization, upon closing of a sale of substantially all company assets and upon conversion of the bankruptcy case.

Interest will be Libor plus 1,100 basis points, with a 500 bps Libor floor.

The company will pay facility fees of 3% of the interim and final commitment amounts.

In addition, as part of the DIP financing, Merisant said it is working with the majority holder of its 9½% senior subordinated notes on a plan of reorganization that would significantly deleverage the company's balance sheet.

The company said recent market turmoil triggered the bankruptcy filing, made Friday in the U.S. Bankruptcy Court for the District of Delaware.

"During the last four years, we took aggressive measures that succeeded in cutting costs and making Merisant more efficient as well as building a platform for future growth," chairman and chief executive officer Paul Block said in the release.

"Yet despite these efforts, recent turmoil in the financial and credit markets has made it impossible for us to refinance our debt, without which we cannot complete the restructuring of our business.

"Restructuring our balance sheet is the best way for us to maximize the success of our company and its many products. We expect that Merisant will emerge from this process stronger and better able to compete, and thus this filing and balance sheet restructuring is in the best interests of the company and its stakeholders.

"During this restructuring, we will continue to support our current brands and launch PureVia, our exciting all-natural, zero-calorie sweetener, in partnership with PepsiCo, as well as advance our plans to introduce natural sweeteners in other markets.

"Simply put, this balance sheet restructuring is about reducing the company's debt, not disposing assets, reducing the workforce or reconfiguring our operations."

According to the release, the company has also requested court approval of its first-day motions, which will allow it to maintain its existing cash management system, pay pre-filing employee wages and otherwise maintain employee benefits, fulfill pre-filing vendor obligations, maintain utility services, pay outstanding taxes and honor its customer programs.

The Blackstone Group is Merisant's financial adviser.

Merisant, a Chicago-based marketer of low-calorie tabletop sweeteners, filed for bankruptcy on Jan. 9. Its Chapter 11 case number is 09-10059.

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