Merisant gets court approval to finance PureVia roll-out

15-Jan-2009 - Last updated on 15-Jan-2009 at 17:53 GMT

Merisant has received approval from the bankruptcy court to continue operations, allowing it to support the launch of the stevia-derived sweetener PureVia, which is expected to help turn its fortunes around.

The tabletop sweetener company Merisant Worldwide, Inc. and its subsidiaries announced that the United States Bankruptcy Court for the District of Delaware has approved all First-Day Motions that the company submitted, which means that business can go on in “a normal manner”.

The court has also approved the $20m debtor-in-possession (DIP) financing facility from Wayzata Investment Partners which Merisant secured earlier this week.

The customary First-Day Motions gives Merisant authorization to incur and deploy $4m of its $20m DIP financing facility, among other measures.

The company said in a statement: “This additional liquidity will ensure that Merisant has adequate liquidity to operate while it restructures its debt.”

The remainder of the $20 million will become available after entry of a final order on the DIP facility, scheduled for February 5th.

The company said that, in addition to other measures, it “will be able to use its existing and newly drawn cash to pay its post-filing obligations in the ordinary course and support the launch of PureVia, the company’s new all-natural, zero-calorie sweetener”.

PureVia

Last summer the Whole Earth Sweetener Company, (a subsidiary of Merisant) joined with PepsiCo and PureCircle to introduce the PureVia brand of the all-natural, zero-calorie sweetener Reb A, which is made from the stevia plant leaf .

Merisant announced on Monday that it had filed for bankruptcy in order to restructure its balance sheet, with the aim of strengthening the company’s financial health and long-term growth prospects.

Its brands include the sweeteners Equal and Canderel, but competition from rival sweeteners in recent years, such as Splenda, are said to have eaten into its market share.

According to Moody's Investors Service Merisant, headquartered in Chicago, does have growth prospects with PureVia.

It said it anticipates that recovery levels in any default would be average “given the potential for PureVia to offset the decline in Merisant's aspartame-based sweeteners”.