Borden Dairy Company has voluntarily filed for Chapter 11 bankruptcy protection as it aims to cut its debt load.
Dallas-headquartered Borden intends to use the court process to pursue financial restructuring to position the company for long-term success. The company said that operations will continue as normal during the reorganisation.
“Despite our numerous achievements during the past 18 months, the company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry,” said Borden CEO Tony Sarsam.
“These challenges have contributed to making our current level of debt unsustainable. For the last few months, we have engaged in discussions with our lenders to evaluate a range of potential strategic plans for the company.
“Ultimately, we determined that the best way to protect the company, for the benefit of all stakeholders, is to reorganise through this court-supervised process.”
Last year saw Borden expand its product portfolio with the Kid Builder line of flavoured milk and limited-edition gingerbread eggnog. In 2019, the company increased year-over-year sales.
“Borden is EBITDA-positive and growing, but we must achieve a more viable capital structure,” Sarsam added. “This reorganisation will strengthen our position for future prosperity.”
Borden operates 12 milk processing plants and nearly 100 branches across the US that produce and distribute nearly 500 million gallons of milk annually. The company employs 3,300 people.
The announcement comes less than two months after US milk producer Dean Foods filed for Chapter 11 bankruptcy protection.
According to the US Department of Agriculture, Americans’ per capita consumption of fluid milk has fallen 26% in the past two decades.
© FoodBev Media Ltd 2019