NEWS BRIEF: Salt Lake City's Vobev Files for Chapter 11 Bankruptcy Protection with over $470 Million in Secured and Unsecured Debt
Utah Bankruptcy Court filings show that Vobev (a Utah-based beverage can manufacturer, filler, and logistics firm) is moving forward with the Court and its debtors on a "Stalking Horse" bid process to fund the company through its voluntary bankruptcy proceedings and then sell-off the company and its assets.
Additionally, Los Angeles, California-based ARES Capital has submitted an initial "Stalking Horse" Term Sheet to the Court outlining $402 million in bifurcated debt for its interim Debtor in Possession (DIB) funding proposal and its offer to purchase Vobev, an offering that has been approved by the Court and Vobev.
Vobev, a Utah-based beverage can manufacturer, filler, and logistics company sitting on a 1.5-million-square-foot campus in western Salt Lake City has just entered Chapter 11 bankruptcy protection proceedings citing over $470 million in secured and unsecured debt.
According to details contained in the various filings for Case No. 24-26346, (initially filed on Monday, 09 December 2024 with the U.S. Bankruptcy Court, District of Utah), Vobev and its over 200 debtors, have agreed to enter into voluntary bankruptcy proceedings with the intent of selling-off the company and its assets to another firm.
{NOTE: The details available on the URL highlighted above are only viewable through the PACER Case Locator (PCL) system, aka, the Public Access to Court Electronic Records database. Readers with a PACER account that are logged into the PACER system will be able to view the related documents through the link above.}
The firm in question is Atlanta, Georgia-based ARES Capital Corporation (NASDAQ:ARCC), the largest publicly traded business development company in the United States, a firm that specializes in financial transactions ranging from
- Acquisitions to Leveraged Buyouts, and from
- Rescue Financings to Restructuring.
As agreed to by Vobev, its debtors, and the Bankruptcy Court, the company has agreed to move forward with what is known as a "Stalking Horse" bid, a process Investopedia describes as
- "... An initial bid on the assets of a bankrupt company ..."
- One "... chosen (in advance) by the bankrupt company (that) becomes the minimum amount the assets can be purchased for (with) ..."
- "The assets ... then opened up to other bidders, who must make a higher bid to succeed in buying them (with) ..."
- "(The) stalking horse bidder ... afforded various incentives, such as expense reimbursements and breakup fees."
In the case of ARES Capital, on Monday, it submitted to the Court and Vobev a Debtor In Possession (DIP) "Stalking Horse Term Sheet" to acquire the assets of Vobev for combined loans of $402 million, with annual interest payments of 9% (paid monthly), plus the Standard Overnight Financing Rate (SOFR) interest, which currently sits at over 4.6%.
As outlined in the filings, the DIP funding from ARES Capital would also allow Vobev to continue operations as its Chapter 11 case works its way through Bankruptcy Court.
If I have read the filings correctly, the Stalking Horse bid has been accepted by both Vobev and the Court, which would puts ARES Capital in the driver's seat to acquire Vobev (although a date has not apparently been set for formally accepting the Stalking Horse bid).
Vobev hit the public eye in September 2021 when it formally announced its grand opening in Salt Lake City, a story broken by me in Utah when I served as Publisher and Editorial Director for Silicon Slopes in "Vobev: The BevTech Manufacturing Startup Planning to Shake-up the Canned Beverage Industry."
At the time, Vobev controlled roughly 65 acres of land near the intersection of Interstate 15 and 5600 West in western Salt Lake City, with "... a soup-to-nuts approach to the canned beverage industry ..." centered around
- "Making cans,
- "Filling cans, and
- "Logistics solutions."
Since then, Vobev has expanded to
- ~500 employees,
- Capable of producing/filling 2,600 cans/minute,
- In six different can sizes,
- Produced with external graphics created to match the design needs of the respective beverage companies, with
- The ability of also handling on-site storage and third-party logistics for its customers.
According to its filings with the Court, Vobev has estimated assets (and liabilities) of $501 million to $1 billion each.
Separately, Vobev has retained the services of Ropes & Gray as lead bankruptcy counsel on its case, with Ray Quinney & Nebeker serving as co-counsel to represent the company on-the-ground in Utah.
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