Tupperware Brands (NYSE:TUP) surged 50.9% before the bell on Friday after it reached a debt restructuring deal with its lenders, four months after the cash-strapped company flagged substantial doubt about its ability to continue as a going concern.
The deal includes reduction/reallocation of ~$150M cash interest and fees; extension of the maturity of ~$348M principal and reallocated interest to FY27 (with payment-in-kind interest); lower amortization payments by ~$55M; and immediate access to ~$21M revolving credit.
“This agreement provides us with the financial flexibility to continue executing on near-term turnaround efforts,” said CFO Mariela Matute.
Tupperware (TUP) also delayed filing its Q1 earnings report on account of restatement of FY22 results due to misstatements and internal control weaknesses.
The company has been struggling to stay afloat, weighed down by a $705M debt burden and weak sales after the end of the pandemic, during which it had seen strong demand for its plastic containers as people stayed home and cooked.
On the other hand, shares of Tupperware (TUP) have piqued the interest of retail investors of late, seeing a fourfold surge in their value over the last month.
The latest meme stock’s short interest has gone up to 25%, which SA analyst A. Vandendael said could indicate a potential decline in momentum. “While there’s a chance of significant short-term gains, there’s an equally likely possibility of substantial losses.”