What happened
A debt restructuring deal was bringing the bulls back in force to Tupperware Brands (TUP) on the last trading day of the week. As of midafternoon, the storied home-goods purveyor's share price was up a mighty 49%. The S&P 500 index, by contrast, was inching up only marginally.
So what
Late Thursday, Tupperware announced (no doubt with immense relief) that it has finalized an arrangement with its lenders to restructure outstanding debt.
The deal has a number of components. It provides scope for Tupperware to reduce or reallocate around $150 million of interest and fees on its borrowings, extend the maturity of roughly $348 million of reallocated interest and fees to its 2027 fiscal year, and reduce looming amortization payments by $55 million. Lastly, it will provide the company with immediate access to an approximately $21 million revolving credit facility.
While this doesn't mean the beleaguered Tupperware is entirely out of the financial woods yet, it does provide a clear path to improvement. Previous to this, many investors and observers were convinced that the company, heavily weighed down with debt, might have to cease operations.
Now what
As has occasionally happened in these situations, once that speculation started to swirl, Tupperware became a meme stock. Counterintuitively, it became popular among risk-tolerant investors who were gambling on a turnaround.
While such plays often don't succeed, Tupperware's advantageous deal with its lenders provides more than a glimmer of hope that it can stage a dramatic recovery.
