(Bloomberg) -- City Brewing Co., which makes alcoholic drinks such as White Claw and Pabst Blue Ribbon, is talking to creditors about inking an out-of-court restructuring with lenders taking control of the company, according to people with knowledge of the matter.
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Negotiations are ongoing and no final decision has been made, said the people, who asked not to be identified discussing a private matter.
Discussions with creditors ramped up late last year, as City Brewing, whose investors include Charlesbank Capital Partners and Oaktree Capital Management, looked to shore up its cash reserves amid weakening demand, Bloomberg previously reported.
A representative for City Brewing didn’t immediately respond to a request for comment, while representatives for Charlesbank and Oaktree declined to comment.
City Brewing is a contract manufacturer of beer and flavored malt beverages including spiked seltzers like White Claw, according to Oaktree’s website. Mark Anthony Brands Inc. owns the White Claw brand. A representative for Mark Anthony Brands declined to comment.
The La Crosse, Wisconsin-based brewer issued a new $35 million bridge loan and entered into a forbearance agreement after missing interest payments, according to an S&P Global Ratings report from January.
The move marked the second time in less than a year that the brewing company has reworked its debt stack.
Last April, City Brewing overhauled its capital structure, which allowed it to shuffle assets into a newly formed legal entity and borrow $115 million against that collateral, Bloomberg previously reported. That deal also revamped the creditor hierarchy and called for below-par debt exchanges.
Meanwhile, the parent of Pabst Brewing Company in January moved intellectual property tied to nine brands plus the equity interest in real estate located in Irwindale, California, into a newly created entity, according to a Moody’s Ratings report at the time downgrading the company’s credit score. It then used those assets to raise a $107 million super-priority term loan and used part of that to fund a $60 million payment to City Brewing, Moody’s said.
A consortium of investors including Charlesbank, a minority shareholder, bought City Brewing in 2021. Oaktree and Blue Ribbon Partners were also listed as investors, according to a statement at the time.