After Beyond Meat CEO Ethan Brown indicated in November he was seeking additional liquidity, the company has now reportedly reached out to private investors to raise $250m.
US investment bank PJT Partners has been hired to oversee the sourcing of a senior secured loan for general corporate capital, Bloomberg has reported, citing unnamed sources with knowledge of the proceedings.
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The same sources, who declined to be identified, suggested the cash could also be used to service $1.15bn of convertible bonds coming due in 2027.
While the Los Angeles-headquartered plant-based meat business had not responded to Just Food’s request for confirmation on the fund raise, Brown said in November, as he presented third-quarter results, that he would seek additional capital before the financial year ended.
PJT has also been approached by this publication for comment ahead of Beyond Meat’s final-quarter numbers due on 26 February, when further details or confirmation of the planned fund raise may be disclosed.
Brown said in November: “We’re not going to, at this point, get into how much we may be looking to raise before the end of the year. But I’ll just reiterate that, yes, we do intend to put additional liquidity on the balance sheet before the end of the year, and then we’re still looking at a more holistic sort of balance sheet restructuring at some point in the next year.”
Beyond Meat continues to be loss-making on the bottom line and has failed to turn a profit since its IPO in 2019. Similarly, EBITDA has not been in the red since the meagre $11.8m generated in 2020.
Nasdaq-listed Beyond Meat’s cash on hand has also dwindled.
At the third-quarter stage of fiscal 2024, cash and cash equivalents stood at just shy of $135m. Meanwhile, cash used in operating activities through the year shrank to $69.9m from $79.3m.
To cap the downbeat outlook, Beyond Meat revised down its revenue guidance for the year in November to $320-330m from $320-340m previously.
Anything below 2023’s sales revenue print of $343.4m would mark another annual decline for Beyond Meat. It has not registered growth since the 14% uptick in 2021 to $464.7m when adjusted EBITDA was a $112.76m loss.
Writing in November, Alexia Howard, a food analyst at US investment bank AllianceBernstein, suggested there are limits to what Beyond Meat might be able to raise on the market as she said the sales guidance implied low single-digit growth in the final quarter.
She said at the time: “The company is looking to raise money before year-end, likely through its mixed shelf offering, allowing them to issue up to $250m, but with a market cap of circa $400m there is only so much it can raise to shore up its balance sheet.”
