Turnaround Allows New Equity and Refinancing

Agribusiness & FoodPerformance ImprovementRefinancing & TransactionsTurnarounds & Restructuring

70M

Annual Sales

15M

in Debt

Farm Fresh Catfish, Hollandale Mississippi

Challenge

Catfish Farm Operation. $70 million annual sales. $15 million debt.

  • The Company was a leading processor of catfish.
  • The Company was formed by a group of catfish farmers and financial investors to purchase a division of Hormel.
  • A subsequent buy-out of the financial investors and an unsuccessful outsourcing of company management to Farmland Industries in anticipation of a merger, which did not occur, left the company without management, deeply in debt and unprofitable.

Solution

  • MorrisAnderson was engaged as turnaround advisor to the Board of Directors and as investment banker to develop strategic alternatives.
  • MorrisAnderson successfully rebuilt management and restructured operations.
  • Developed a creative equity financing approach by selling catfish delivery rights to independent farmers who wanted guaranteed processing capacity.

Results

  • MA’s approach generated $5.6 million of new equity capital.
  • Following this equity infusion, there was a refinancing of the senior secured debt via $15 million of bonds issued by the State of Arkansas.