Earlier this month the company filed a voluntary petition for protection under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the District of Arizona. None of the Company’s subsidiaries, including its Brazilian rice bran oil operation, Irgovel, were included in the bankruptcy filing.
The extra funding, combined with cash flow from operations, will allow the company to resume normal day-to-day operations, including payment of post-petition obligations to vendors, service providers and employee wages, said a company statement.
The company’s chief executive officer John Short said: "With access to working capital in place, we can return to more normal day-to-day operations and focus on implementing the next steps in our restructuring plan. While there is a lot of work before us in the coming months, we remain optimistic about our management team's ability to successfully restructure the company and emerge as a more focused, stronger and viable company."
The company plans to use the protection provided by the courts under Chapter 11 to restructure its operations, reduce overhead and sell non-core assets. NutraCea says it will focus on its core businesses of stabilized rice bran research, development and commercialization, rice bran oil, nutraceuticals and baby cereal.
Streamlined cost structure
When the firm filed for Chapter 11 protection on November 10, Short pledged: "We will work hard to emerge from this process as quickly as possible with a streamlined cost structure that should allow us to operate as a healthier, more competitive and profitable company."
NutraCea currently owes about $3.58m to Wells Fargo Bank under its old credit facility. The company's obligations under the DIP financing facility will be secured by its facilities in Phoenix, Arizona, Dillon, Montana and Mermentau, Louisiana and all of its personal property assets excluding certain intellectual property assets.