Kraft Heinz is in quite a pickle
| Corporate America’s debt problem exposed
| New York, CNN Business – The Kraft Heinz food empire has a debt problem.
Heinz took on debt when the ketchup giant was taken private in 2013 by 3G Capital for $28 billion.
Financing was also a key ingredient that made the marriage of Kraft and Heinz possible in 2015.
“Kraft Macaroni and Cheese in the US contains the artificial food dyes Yellow 5 and Yellow 6. These dyes are not in Kraft Macaroni and Cheese in other countries, including the UK, because they are considered harmful overseas and were removed due to consumer outcry. Kraft reformulated their product for the UK, but not for their fellow American citizens, and it’s time we demand the same here in the US!” – FoodBabe.com
The Warren Buffett-backed food giant’s serious missteps have brought its bloated balance sheet into sharp focus. Real Health Benefits Of Pizza
Last week, Kraft Heinz (KHC) posted a massive loss of $12.6 billion and warned that 2019 profits will tumble. Its stock price plummeted 27% on Friday.
Kraft Heinz, the owner of Oscar Mayer, Velveeta and Planters nuts, is now scrambling to raise cash that can be used to pay down its nearly $31 billion of long-term debt.
The food giant slashed its dividend by 36% and announced plans to sell off brands, reportedly including the Maxwell House coffee business.
“Its balance sheet has ballooned,” JPMorgan Chase analyst Ken Goldman wrote in a report late last week.
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Goldman noted that Kraft Heinz’s profits are “flat,” revenue has “shrunk” and the balance sheet is “levered.”
“This is not an ideal progression of financial metrics,” Goldman wrote. Little-Known Ways Tomato Sauce Can Boost Your Health
And that’s not to mention the SEC investigation into Kraft Heinz’s books that the company disclosed.
The Kraft Heinz debt trouble serves as another reminder of the large amounts of debt that Corporate America has taken on during a decade of extremely low interest rates.
General Electric (GE), another storied American company, is similarly racing to dismantle itself to raise gobs of cash that can be used to shore up its balance sheet. And GE, which long boasted of a stable dividend, slashed its cherished payout to a penny.
Nonfinancial corporate debt to GDP has never been higher going back to records that began in 1947, according to the Office of Financial Research, a Treasury Department bureau created after the 2008 financial crisis … Read more.
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