Financial Struggles Mount: Instant Pot's Parent Company Seeks Financial Relief Through Bankruptcy Filing
In a significant turn of events, Instant Brands, the company behind the popular Instant Pot and other kitchen appliances, has filed for Chapter 11 bankruptcy in Texas. This decision was primarily driven by rising interest rates and reduced access to credit, which strained the company's cash position and made existing debt unsustainable.
The filing, announced on Monday, was made in the US Bankruptcy Court for the Southern District of Texas. The court proceedings will help Instant Brands restructure its obligations and operations to navigate through the challenging financial landscape.
The Instant Pot, a multifunctional pressure cooker, slow cooker, steamer, and rice maker, has gained popularity among millennials and Gen Z for preparing "lazy mom meals" and "cheap dump dinners." Apart from the Instant Pot, Instant Brands also owns Pyrex cookware, CorningWare, and Chicago Cutlery.
Despite the bankruptcy filing, Instant Brands aims to fulfil stock requirements without interruption. The company is seeking $132.5 million in financing, with the intention of using it to weather the bankruptcy process. If approved by the court, the financing will help the company pay off its remaining creditors.
In a letter to retailers, Ben Gadbois, the president and CEO of Instant Brands, emphasised that they remain a top priority. He also stated that tightening of credit terms and higher interest rates impacted the company's liquidity levels and made its capital structure unsustainable.
The bankruptcy filing does not include Instant Brands' brands outside the U.S. and Canada. The company's Canadian operations are commencing ancillary bankruptcy proceedings under the Companies' Creditors Arrangement Act. The Canadian bankruptcy proceedings aim to recognise the American bankruptcy filing.
Instant Brands is seeking recognition of the American bankruptcy filing in Canadian bankruptcy proceedings. If approved, this will allow the company to restructure its operations on a global scale. The company is also seeking to sell its appliance division to private equity, with the aim of emerging from bankruptcy as a stand-alone entity called Instant Pot Brands.
In a separate letter, Gadbois assured former employees and retirees that benefits would still be met. The restructuring plan, approved in February 2024, marks a significant step towards Instant Brands regaining financial stability and continuing to serve its customers with their beloved kitchen appliances.
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