Instant Brands wins Chapter 11 plan approval

May 2024 | DEALFRONT | BANKRUPTCY & CORPORATE RESTRUCTURING

Financier Worldwide Magazine

May 2024 Issue

The US Bankruptcy Court for the Southern District of Texas has approved a Chapter 11 restructuring plan for Instant Brands, the company announced in late February.

Under the terms of the plan, Instant Brands will reorganise its housewares business under new lender-controlled ownership. As part of the restructuring, Instant Brands’ lenders will offer financing to exit Chapter 11 bankruptcy.

The company, which filed for bankruptcy protection in June 2023, received an additional $30m in new term loan financing from its lenders in August, which increased the amount of its term loan credit facility to $162.5m. In November 2023, an affiliate of private equity firm Centre Lane Partners announced it had agreed to acquire the appliances division of Instant Brands. The company’s previous owner, private equity firm Cornell Capital, acquired Instant Brands in 2019.

The company expects to successfully emerge as a stronger, well-capitalised, standalone housewares business with new owners and iconic brands that is positioned for long-term success, it said in a statement. Following the court’s confirmation, Instant Brands said it was proceeding with a reorganisation of its housewares business and transitioning ownership to its lenders and anticipated emerging from Chapter 11 by the end of February.

“We are pleased to have reached this important milestone, bringing Instant Brands’ housewares business another step closer to new ownership and a return to a properly-funded capital structure that will enable the Company’s continued success,” said Ben Gadbois, president and chief executive of Instant Brands. “We have achieved the goals we set out when we initiated this process. Last November we separated and sold our appliances business, and set that business up for success under new ownership. For our housewares business, we have continued driving strong performance with market share gain in key categories and secured a bright future for our iconic housewares brands.”

“On behalf of the management team, I want to thank our amazing employees around the world for their incredible patience and resilience throughout this incredibly complex process, all while maintaining a steady focus on serving our loyal customers and consumers. I also want to express my sincere gratitude to our lenders, legal and financial advisors, customers, vendors and all our key business partners for their continued support over the last year. Our partners around the world will be able to continue working with our housewares business that is moving forward with a significantly improved capital structure and is positioned to drive sustained growth and profitability on a global scale,” he continued.

Instant Brands’ reorganisation plan also provides a framework for a significant reduction of the company’s pre-bankruptcy indebtedness, according to court documents. Those moves will position Instant Brands for long-term success, the company said. The financial terms of the plan include the equitisation of over $390m of prepetition term loan claims into 100 percent of the new equity interests.

Upon emerging from Chapter 11, court documents indicate that Instant Brands’ reorganised capital structure will consist of up to $210m in aggregate principal amount of the exit financing and 100 percent of new equity interests issued in book entry form and distributed to the holders of prepetition term loan claims.

Instant Brands employs about 1800 people globally and operates in Canada, Singapore, the UK, South Korea, Taiwan and China. The businesses outside the US were not part of last summer’s bankruptcy case. The company is most commonly known for its Instant Pot, but also owns a number of other brands, including Corelle, Pyrex, Snapware, CorningWare, Visions and Chicago Cutlery. At the time of its Chapter 11 filing, Instant Brands shared that one or more of its products was in 90 percent of American homes. The size of the Instant Pot market, which would include versions not made by Instant Brands, was estimated to be $4.7bn in 2022. That was expected to double by 2031, according to Transparency Market Research.

Richard Summerfield