Tropicana is in big financial trouble

Florida is being blasted with stronger hurricanes than ever before. A prolific disease carried by insects continues to devastate orange groves. And, on top of all that, consumers are watching their sugar intake. It’s all adding up to a disaster for Tropicana orange juice.

Florida has been blasted with stronger hurricanes than ever before. A prolific disease carried by insects continues to devastate orange groves. And, on top of all that, consumers are watching their sugar intake. It’s adding up to a disaster for Tropicana orange juice. Tropicana, founded in 1947 by an immigrant from Sicily who developed a process for freezing concentrated orange juice, is in financial distress and could be headed for bankruptcy. Tropicana Brands Group, which owns Tropicana, Naked, KeVita and other juice drinks, has seen sales and profit deteriorate in recent years. The company’s revenue slipped 4% last quarter and its income dropped 10%, according to Debtwire, a financial services publication. Actions from its owners paint a much more dire picture. PAI Partners, a European private equity firm that took a controlling ownership stake in the company four years ago from PepsiCo, recently provided a $30 million emergency loan to Tropicana, “showing that they are a lender of last resort,” and are “not confident any value remains from their initial investment,” said Tim Hynes, the head of credit research at Debtwire. PepsiCo, which still owns a minority stake in the company, also said that it wrote down the value of its investment by $135 million last quarter. “Tropicana’s financial difficulties have raised concerns about how the company will manage its balance sheet,” Hynes said. “Tropicana faces an uphill battle.”