NutraCea prepares to exit bankruptcy
NutraCea said it has taken major step forward in its effort to emerge from bankruptcy by filing a proposed Plan of Reorganization and related Disclosure Statement with the Bankruptcy Court last week.
NutraCea chairman and CEO W. John Short said: "Management committed considerable time to the preparation and negotiation of the Plan; we can now redirect our management team's full attention to increasing profitable sales and completing the asset monetization programs that will allow us to repay our creditors.
"We look forward to Plan confirmation and our emergence from Chapter 11 later this year as a stronger more focused Company."
In November, NutraCea said it intended to focus on its core business of stabilized rice bran, rice bran oil, nutraceuticals and baby cereal.
It added that it intended to emerge from the process as soon as possible, and in a stronger position than before the filing, but did not put a fixed time period on how long this might take.
Cost-cutting measures since the company filed for bankruptcy have included shedding 17 percent of its US workforce and receiving court backing to move to cheaper premises.
The company had previously said that 2008 had been a challenging year, and that it intended to sell assets and increase revenues in order to provide cash for continuing operations. In the past, it had looked to equity funds for additional liquidity but due to the company’s financial position and the state of equity markets it was unable to turn to them for funding.
Rice bran is a by-product of rice processing that is usually discarded or used as animal feed, and NutraCea claims to be the only company in the world with the technology to stabilize the rice bran for human consumption, while maintaining its nutritional properties.
While rice bran is rich in fiber and a host of other beneficial nutrients, one of the main attractions for manufacturers is the cost savings it can confer.
It can be used as a low cost flour extender and a substitute for other, more expensive ingredients, including wheat. It is also claimed to improve product yield and maintain product quality.