U.S. Bankruptcy Court Judge Laurie Silverstein has approved Fong Chun Formosa (FCF) Fishery Company’s stalking-horse bid for Bumble Bee Foods, giving the Kaohsiung, Taiwan-based tuna supplier ownership and control over the iconic American brand.
In November 2019, FCF entered a stalking-horse bid for Bumble Bee, which had filed for chapter 11 bankruptcy in the U.S. state of Delaware. FCF has long been one of Bumble Bee's top suppliers of albacore, skipjack, yellowfin, and bigeye tuna.
On Tuesday, 21 January, a scheduled auction for Bumble Bee was called off after no other bidders emerged. The sale was finalized by Silverstein in a court hearing on Thursday, 23 January.
FCF will pay a base price of USD 925.6 million (838.3 million million) for Bumble Bee, according to court documents. It will also take on nearly all of Bumble Bee’s liabilities, including USD 17 million (EUR 15.3 million) still due as part of the company’s guilty plea to fixing the prices of canned tuna in an antitrust case brought by the U.S. Department of Justice.
The purchase agreement lists Tonos US LLC as the U.S. buyer, Tonos 1 Operating Corp. as the Canadian buyer, and Melissi 4 Inc. as the equity buyer. All three are affiliates of FCF, and the purchase agreement includes signatures from FCF Co. President and CEO Max Chou; Jerry Chou, an FCF shareholder and manager of special projects, on behalf of Tonos 1; and Melissi 4 Director Liu Yu Feng. For Bumble Bee, the document was signed by Kent McNeil, Bumble Bee’s vice president and chief financial officer.
The sale was contingent upon Bumble Bee reaching resolutions with the numerous entities to which it owed money. Those entities included FCF, which was carrying around USD 53.1 million (EUR 48.1 million) in unpaid and outstanding bills, according to an affidavit filed 21 January by Jerry Chou.
As part of the sale, FCF has guaranteed all of Bumble Bee’s performance and payment obligations. The sale is conditioned on the judge approving a final edited sale order, which may contain additional provisions that FCF must meet.
Following the transaction, according to Chou’s affidavit, FCF will have approximately USD 650 million (EUR 589.3 million) in total funded indebtedness, with approximately USD 490 million (EUR 444.3 million) of that amount in a term loan and an additional USD 145 million (EUR 131.5 million) drawn from an asset-based loan. FCF’s total liquidity is expected to exceed USD 75 million (EUR 68 million) for the remainder of 2020, Chou added.
Chou reported FCF has annual revenues of USD 1.7 billion (EUR 1.5 billion) and more than USD 300 million (EUR 272 million) of cash on its balance sheet, with USD 5 million (EUR 4.5 million) of long-term debt.
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