PLANT-BASED burger maker Beyond Meat is sounding out investors to borrow as much as US$250 million from private credit lenders, its second such attempt in less than 12 months, according to sources with knowledge of the matter.
The Los Angeles-based producer of meat substitutes is working with PJT Partners on the outreach for a new senior secured loan, said the sources, who declined to be identified as the details are private.
Although the financing is for general corporate purposes, the debt could be used to tackle some of the company’s US$1.15 billion of convertible bonds that are due in 2027, the sources added. The move comes less than a year after Beyond Meat tried a similar outreach to direct lenders through Goldman Sachs, though it was not able to strike a deal at the time. Conversations are preliminary and a deal may not materialise.
A Beyond Meat representative did not immediately respond to a request for comment, while spokespeople from PJT and Goldman Sachs declined to comment.
One-time Wall Street darling Beyond Meat has seen its stock price plummet after it has failed to make inroads with consumers. In the company’s most recent earnings call, chief executive officer Ethan Brown said it was working on improving its finances and potentially restructuring them.
“We do intend to put additional liquidity on the balance sheet before the end of the year,” he said on the November call. “And then we are still looking at a more holistic sort of balance sheet restructuring at some point in next year.”
Beyond Meat is expected to report fourth-quarter earnings next week. It reported higher net revenue last quarter compared to the year prior and also improved its gross profit, the third quarter earnings show. Still, Beyond Meat has been dealing with negative free cash flow and a much smaller valuation than when it went public.
The company, as other plant-based producers, has seen weaker demand due to higher inflation. Last year, two of the earliest adopters of Beyond Meat’s products, Carl’s Jr and Del Taco Restaurants, stopped serving the plant-based beef at many of their restaurants as consumer enthusiasm fades.
However, surging egg prices and shortages in the US could push consumers back to vegan substitutes, Bloomberg reported. BLOOMBERG
