By Dietrich Knauth
NEW YORK (Reuters) - Prima, a private-equity backed farmer that is the largest producer of peaches and other stone fruit in North America, filed for Chapter 11 bankruptcy protection in Delaware on Friday.
The company, owned by private equity firm Paine Schwartz Partners, has about $679 million in debt, and plans to sell its business in bankruptcy, according to bankruptcy court documents. Prima farms peaches, nectarines, plums and apricots on its 18,000 acres (7,284 hectares) of farmland in California's San Joaquin Valley.
Prima has struggled under its high debt load, and it has also faced significant setbacks since 2020, including a salmonella outbreak that led to a recall of peaches in the U.S. and the 2020 Creek Fire in California, which damaged orchards and reduced crop yields and quality.Prima will try to find a buyer for its assets by November, hoping to avoid an upcoming cash crunch between its profitable harvest seasons. Prima has about $26 million in cash, and it could run out of money by January 2024 if it doesn't find a buyer before next year's harvest season begins in May, according to court documents.
If no buyer emerges, Prima will pivot to a debt restructuring or a liquidation of its business, according to court documents.
The company was formed from a 2019 merger of Gerawan Farming Inc. and Wawona Packing Company. The company had over $300 million in sales revenue in 2022, with 60% of that coming from sale of peaches, according to court documents.