November 12, 2019 / 1:37 PM / a month ago

Dean Foods files for Chapter 11

TruMoo chocolate milk produced by Dean Foods Co. is shown in this illustration photograph in Encinitas, California United States May 10, 2016. REUTERS/Mike Blake

(Reuters) - Dean Foods Co DF.N said on Tuesday it filed for Chapter 11 bankruptcy protection, months after the owner of TruMoo chocolate milk and Meadow Gold ice creams ended a strategic review and decided to remain as a standalone firm.

The Texas-based firm said it was in talks over a potential sale of its assets with Dairy Farmers of America, a company owned by farmers.

Dean Foods has been struggling in recent years as health-conscious U.S. consumers shift to non-dairy and private-label alternatives.

“We continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption,” Chief Executive Officer Eric Beringause said.

The company said it has received a $850 million debtor-in-possession commitment from certain of its existing lenders, led by Rabobank, to keep its operations running.

Dean Foods, which has a market valuation of about $74 million, had a net debt of about $968 million at the end of June.

Earlier this year, the company explored options, including a sale, but ended that review in September and decided to execute a “standalone” operating plan under a new CEO.

The company said substantially all of its subsidiaries were part of the proceeding, which has been filed in the Southern District of Texas.

Reporting by Praveen Paramasivam in Bengaluru; Editing by Sriraj Kalluvila

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