Beyond Meat is not bankrupt, but is shuffling its debts.
The company, once the darling of the plant protein craze, has suffered a fate similar to all its competitors – a decline in sales resulting in losses.
In the case of Beyond Meat, sales have declined by 15 per cent over the first half of this year compared to last year, and last year was a lot poorer than the year before.
Beyond Meat has borrowed $1.1 billion at zero per cent interest in convertible notes, but that all comes due within the next 18 months.
It has offered to swap those convertible notes into common shares and $202.5 million in loans at seven per cent interest.
The issuance of that many common shares will increase the outstanding total to four times as many. That would dilute the value of common shares already held by investors.
Maple Leaf Foods also plunged into the plant protein business and has taken significant write-downs on those investments.
Although sales declined by more than nine per cent last year, in February it merged its meats and plant proteins divisions after the plant protein business achieved break-even.
The company invested heavily to buy Lightlife and Field Roast brands, bought a large factory in Indianapolis, Indiana, then built one of the largest plant protein factories (230,000 square feet) at Shelbyville, Indiana that cost $230 million, but as early at March, 2020, was running into headwinds as sales increased by only half as much as then-president Michael McCain predicted.
