Reddy Ice Holdings Inc. is a big player in the packaged ice manufacturing and distribution business. However, the Dallas-based ice manufacturer and distributor filed for Chapter 11 bankruptcy this week, citing over $500 million in debts.
Reddy Ice makes about 1.8 million tons of ice a year, distributing the packaged product around the country. However, despite continued demand for their product, the company filed a near $70 million loss in profits last year alone citing soft economic conditions as the culprit. Having entered Texas bankruptcy court this week, the company is hoping it can restructure its debts and satisfy creditors through a Chapter 11 filing.
Part of the plans for the company in bankruptcy include a new agreement with debt holders, which could provide a second-lien stock option that gives shareholders as much as 17 cents a share on future profits. Reddy Ice Holdings Inc. is also considering a buyout of competitor Arctic Glacier, who is also currently in bankruptcy protection. The company is hoping for a quick negotiation and debt resolution, whereby they can exit bankruptcy within the next 45 days.