Penford Corporation – EGI

Penford Corporation

Key Takeaway

Rescue capital

Penford, an industrial and food starch manufacturer, experienced a perfect storm when an approaching bank debt maturity coincided with an economic slowdown and followed a major flood at one of its facilities. In 2010, we invested $40 million in the form of preferred stock with warrants, which allowed Penford to bridge the gap between its prior term loan balance and the smaller credit balance its banks were willing to extend, and gave the company additional liquidity for capital investments. Penford was ultimately able to take out the preferred when economic conditions improved, and our common stake allowed us to participate in the company’s recovery.