| Imperial Sugar Co., the nation's largest processor and
marketer of refined sugar, raised the possibility Thursday of a Chapter 11
bankruptcy filing to deal with its financial problems.
A Chapter 11 filing is one scenario in a restructuring that is planned
for fiscal 2001, said president and chief executive James C. Kempner.
The action is being considered because of the failure to make a $12.2
million interest payment, due Friday, on $250 million in senior
subordinated notes. But a waiver agreement has postponed the due date to
Jan. 8.
Since January, the company, based in Sugar Land, Texas, has been
struggling with plunging prices in a market awash with too much sugar.
Part of the problem is that too many acres are planted with sugar
beets, a situation made worse by a bumper harvest.
The problem is industrywide and has placed the federal government in
the unhappy position of owning more than 1 million tons of sugar, for the
purpose of holding it until there is a better balance between supply and
demand, or until the sugar can be moved into foreign aid programs.
Imperial's profit is down because of lower prices in the retail and
food-service markets, made worse by high energy prices, particularly in
California, where it is a significant operator.
The company markets its sugar nationally under the Imperial, Dixie
Crystals, Spreckels, Pioneer, Holly, Diamond Crystal and Wholesome
Sweeteners brands.
Although it recently has moved up slightly, the price of refined sugar
is basically at a 15-year low, according to Bill Schwer, Imperial's
executive vice president and general counsel.
The company, founded in 1843, has never been in a position this
difficult before, Mr. Schwer said.
Trading of the company's shares on the American Stock Exchange was
delayed Thursday, pending the announcement. The price before the trading
halt was 81 cents, down from a 52-week high of $4.06 on Jan. 31.
Sales for the fourth quarter, which ended Sept. 30, were $457.2
million, down from $487.9 million a year earlier. The company recorded a
net loss of $37.1 million, or $1.15 per share, against a year-earlier net
loss of $8.6 million, or 27 cents per share.
For the year, sales were $1.82 billion, down slightly from $1.88
billion a year earlier. The net loss for the year was $34.7 million, or
$1.07 per share, compared with a year-earlier net loss of $18.1 million,
or 57 cents per share. |