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ST. LOUIS - Benson Hill, Inc. (NASDAQ:BHIL), a seed innovation company, has filed for Chapter 11 bankruptcy and is seeking to sell its business, according to a recent announcement. The company, known for its advancements in seed innovation and proprietary technology, made the filing in the United States Bankruptcy Court for the District of Delaware. According to InvestingPro data, the company has been struggling with weak gross profit margins of just 4.3% and a concerning debt-to-equity ratio of 3.52x.
As part of the bankruptcy process, Benson Hill has secured approximately $11 million in Debtor-in-Possession (DIP) financing, which is subject to court approval. This financial support is expected to sustain the company’s operations throughout the Chapter 11 proceedings. InvestingPro analysis shows the company had been rapidly burning through cash, with negative free cash flow of $42.2 million in the last twelve months.
The company has also submitted various first-day motions to the court, aiming to maintain its business operations, including servicing customers and fulfilling obligations to its employees during the restructuring period.
Dan Jacobi, Chairman of the Board of Directors, stated that despite efforts to transform the business through cost reductions, divestitures, debt retirement, and operational optimizations, challenges within the industry and financial constraints necessitated the move to file for Chapter 11. The board believes this approach is the best way forward given the circumstances.
Information about the bankruptcy case is available on a website maintained by the company’s claims agent, Stretto, Inc. Legal counsel for Benson Hill during this process is provided by Faegre Drinker Biddle & Reath LLP, with Piper Sandler & Co. serving as the company’s investment banker.
Benson Hill’s core business revolves around leveraging genetic diversity in soy quality traits, combining its genetic expertise with an AI-driven technology platform and Crop Accelerator. The company’s collaborations with strategic partners aim to enhance the value chain in agribusiness, catering to the demand for better feed, food, and fuel.
This announcement is based on a press release statement and contains forward-looking statements subject to risks, uncertainties, and other factors that could affect the company’s ability to obtain court approval for its motions or successfully negotiate a sale. The company cautions against placing undue reliance on these forward-looking statements, which are only current as of the date they were made. The stock has fallen over 90% in the past six months, with its market capitalization now at just $3.95 million. For deeper insights into Benson Hill’s financial health and 20+ additional ProTips, access the comprehensive Pro Research Report available on InvestingPro.
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