(Bloomberg) -- Ferrellgas Partners LP, whose Blue Rhino propane tank exchange network serves backyard barbecuers across the U.S., filed for bankruptcy to unload debts left over from a failed expansion.
The company sought federal court protection from creditors in Delaware with assets and liabilities of $100 million to $500 million, according to its Chapter 11 petition. The debtor is a holding company, but the operating company, Ferrellgas LP, isn’t part of the bankruptcy and will continue to run without interruption.
Ferrellgas will remain an employee-owned business and there will be no impact on customers, employees, vendors, suppliers or distributors, according to a spokeswoman. The company has almost 800,000 customers across the U.S. and Puerto Rico and a staff of nearly 5,000 people, according to a Ferrellgas statement.
Overland Park, Kansas-based Ferrellgas, burdened with a turbulent propane business and a high debt load, previously said it intended to file for bankruptcy. The holding company debt will be eliminated, more than $1.5 billion of operating company debt will be refinanced, and more than $1 billion of new capital will be raised at the operating company level.
Chairman Jim Ferrell, who has served various roles in the company since 1965, returned to lead the company in late 2016. His mandate was to turn things around after Ferrellgas borrowed heavily to fund an $837.5 million acquisition of midstream company Bridger Logistics LLC in 2015.
Ferrellgas sold off the Bridger assets in parts for significantly less than the purchase price in 2018, with analysts attributing the failure of the Bridger acquisition to bad timing ahead of the collapse in crude prices.
The case is Ferrellgas Partners L.P., 21-10021, U.S. Bankruptcy Court for the District of Delaware
(Updates with corporate structure and company statement, starting in the second paragraph)
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