BRENHAM, Texas (AP) — Blue Bell’s chief executive told shareholders this week that Texas billionaire Sid Bass will lend the company up to $125 million, and that the investment is essential for the popular ice-cream maker to remain in business, according to a published report.
Under the terms, the Bass family would get a one-third stake in the company, struggling to recover after listeria contamination forced a crippling national recall in April, according to The Wall Street Journal, which reviewed the letter.
CEO and President Paul Kruse sent the letter to investors Monday saying Blue Bell Creameries was unable to raise enough capital from existing shareholders to remain operational. So the company’s board of directors opted to “work with a single source” who was able to provide the necessary financing, the newspaper reported.
Texas-based Blue Bell on Tuesday announced that Bass would become an investor, but no terms were revealed.
Bass, whose family has deep ties to Fort Worth, is an investor and philanthropist whose father and uncle built an oil fortune. Forbes last year ranked Bass as the 324th wealthiest person in the U.S.
He has not responded to phone messages this week from The Associated Press seeking comment.
In an email Friday, Blue Bell spokesman Joe Robertson declined to elaborate on The Wall Street Journal’s report.
“As a privately held company, we do not discuss financial matters or the ownership interests of individual shareholders,” he said.
Kruse said in the letter that Bass’ financing will allow Blue Bell, one of the top ice cream producers in the country, “to move forward to restart our production and sales effort.”
In a separate letter to shareholders in May, Kruse had sought additional financing from them to avoid recruiting an outside investor who he said could dilute existing shares, the WSJ reported. Kruse said the company faced “a financial crisis.” That same month Blue Bell announced it was laying off 37 percent of its work force.
After issuing the recall because of concerns about listeria, the company stopped production at its facilities in Brenham, Texas; Broken Arrow, Oklahoma; and Sylacauga, Arkansas. Its ice cream was linked to 10 listeria illnesses in four states, including three deaths in Kansas.
No date has been given for when Blue Bell products could be back in stores. Blue Bell last week announced plans to test production runs at its Alabama plant. After a trial period, the company plans to begin building inventory to resume commercial sales.
PrivCo, a data provider on privately held companies, estimates revenue for Blue Bell this year could fall as low as $500 million. The company in 2014 was estimated to have had $680 million in revenue, up from nearly $621 million the year before.