The company said that it intends to focus on its core business of stabilized rice bran, rice bran oil, nutraceuticals and baby cereal. It also said that none of its subsidiaries have been included in the bankruptcy.
NutraCea added that it intends to emerge from the process as soon as possible, and in a stronger position than before the filing, although it has not put a fixed time period on how long this might take. The company listed total assets of $83.7m and total debts of $18.9m in court papers.
CEO W. John Short said: "The court-supervised restructuring process available under Chapter 11 of the US Bankruptcy Code allows NutraCea to gain immediate liquidity and continue operating without interruption, while providing the opportunity to reorganize our operations, strengthen our business performance and create long-term value for our stakeholders."
NutraCea has also secured extra debtor-in-possession (DIP) financing of $6.75m from Wells Fargo Bank to allow it to continue with its day-to-day operations while it carries out its restructuring plans under Chapter 11. It already owes Wells Fargo $3.575m under an existing credit facility.
Short said: “We will work hard to emerge from this process as quickly as possible with a streamlined cost structure that should allow us to operate as a healthier, more competitive and profitable company. We deeply appreciate the dedication and efforts of our employees, who have worked exceedingly hard during this challenging period. We look forward to the continued support of our customers, vendors and business partners as we reposition NutraCea for future growth and profitability."
The company said that its business operations have been “impaired by tight liquidity” but that the DIP financing as well as income from continuing business should see it better prepared to return to more normal daily business interactions while it reorganizes its operations.
NutraCea had previously said that 2008 had been a challenging year, and that it intended to sell assets and increase revenues in order to provide cash for continuing operations. In the past, it had looked to equity funds for additional liquidity but due to the company’s financial position and the state of equity markets it was unable to turn to them for funding at this time.