Hain Celestial weighs Chapter 11 protection as debt maturities loom
Key Facts
Hain Celestial is considering filing for Chapter 11 bankruptcy protection, Bloomberg reported, citing people familiar with the matter, as the company faces a debt burden and approaching repayment deadlines. The report linked its consideration of the option to weak consumer demand alongside its financial obligations. The company is weighing court protection after a financing condition tied to the sale of its international business went unmet. It had planned to use the proceeds to reduce debt. The company disclosed that it had failed to reach an amendment to its credit agreement with lenders by the 12 October 2026 deadline, a condition for completing the sale. It said in the filing that it was continuing discussions with lenders about its capital structure and evaluating all available options.
The company announced an agreement in September to sell its international business to private equity firm Aurelius for about $323 million in cash. It estimated expected net proceeds at closing of between $305 million and $310 million. It earmarked those proceeds for debt reduction after the sale closed. But the credit agreement amendment required to complete the transaction was not secured by the deadline, and the company said in its filing that "this condition was not satisfied." After the condition went unmet, Hain Celestial continued discussions with Aurelius to find a path to completing the sale of the international business.
The annual accounts show the scale of the obligations the company is seeking to address, with the auditor's report citing about $558.0 million in debt due within a year of the balance sheet date. The auditor said the company "currently lacks sufficient liquidity to repay those obligations," warning about its ability to meet the maturities. The report cited substantial doubt about Hain Celestial's ability to continue as a going concern amid insufficient liquidity for repayment. Cash and cash equivalents stood at about $58.1 million at the end of the fiscal year, according to the company's annual report. The company reduced its total debt balance, net of unamortized issuance costs, by $147.0 million during the fiscal year through net repayments.
On the operating side, Hain Celestial reported net sales of $1,353 million in its latest fiscal year, according to its annual results statement. That represented a 13% year-on-year decline, alongside the weak consumer demand cited by Bloomberg in its report on the company's consideration of bankruptcy. The company posted an annual net loss of $305 million, according to the same statement. That narrowed from a net loss of $531 million in the previous fiscal year. The company's planned cost-cutting measures include targeting annual savings of about $16 million compared with the baseline fiscal year.
The company also faces requirements to maintain its stock listing alongside the ongoing capital structure discussions, according to its filings with the U.S. Securities and Exchange Commission. The stock's listing transferred to the Nasdaq Capital Market at the opening of trading on 24 September 2026. Hain Celestial shares continued to trade under the ticker HAIN following the transfer. Nasdaq granted the company an additional period until 22 March 2027 to regain compliance with the minimum bid price requirement. The company said it could carry out a reverse stock split if necessary to regain compliance with continued listing requirements.
The term loans and revolving credit facilities mature on 22 December 2026, according to the annual report, while the company continues discussions with its lenders about its capital structure. Its original timetable targeted completion of the international business sale during the fiscal quarter ending 31 December 2026, subject to closing conditions. According to Bloomberg's report, the company could seek court protection as early as the month following publication of the report. The sources stressed, however, that a decision to file for bankruptcy protection had not been finalized and that the potential course remained subject to change. Hain Celestial said it would provide a further update "upon material developments."