Vital Pharmaceuticals (VPX) – the company behind the Bang Energy drinks brand – has filed for bankruptcy.
In a press release on Monday (11 October), VPX confirmed it was pursuing Chapter 11 protection in the US state of Florida, a move it claimed would allow it to reorganise and regain market share from domestic rivals.
“This filing is a restorative action to help the company recover from recent challenges, including multiple lawsuits that impacted the Company’s short-term outlook,” a VPX statement said.
“VPX intends to use the Chapter 11 process to recapitalise and emerge from bankruptcy well-positioned to continue its rapid growth in the beverage market.”
Under the terms of a Chapter 11 filing in the US, the debtor is allowed to continue business operations (subject to the court’s jurisdiction) whilst it reorganises its affairs and confirms a plan with its creditors. VPX said on Monday that the filing would have “no impact (on) product availability, customer orders or operations”.
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An additional $100m has been lent to the company by unnamed “esteemed syndicate lenders” to ensure operations continue uninterrupted, VPX added.
As part of the restructuring process, VPX has stated its intention to create a new “decentralised direct store distribution (DSD)” network for the Bang Energy brand, which it hopes will enable it to recover to its “pre-Pepsi meteoric annual success”.
The brand was previously distributed by the CSD giant until a spat between the two companies ended with VPX CEO Jack Owoc claiming PepsiCo “engaged in a premeditated plan to destroy Bang from day one”. PepsiCo has since bought into another energy drinks company, Celsius Holdings.
“We are excited about our future, and particularly the new distribution system that we have spent the better part of this year assembling,” said Owoc. “Utilising our new state-of-the-art DSD will allow Bang Energy to get back to our pre-Pepsi meteoric annual success of several hundred percent year over year growth.
“This company was founded on determination and a relentless passion for giving our customers and consumers what they want – and we will continue do so. I know we will successfully emerge from this process as a stronger company.”
In August, speculation was rife that another CSD company – Keurig Dr Pepper (KDP) – was in talks to buy VPX. Unnamed sources told Bloomberg a deal could be valued at more than $3bn, although another source said the price would be closer to $2bn.
KDP subsequently poured cold water on the claims and Owoc later confirmed no deal was in the pipeline, adding he “would never sell Bang Energy” for that amount.