A Sunland produce wholesaler that was once the biggest retailer in the county was on the brink of bankruptcy Friday, when it bought up all of its assets in an attempt to restructure its finances.
Sunland is the largest producer in the Sunland Lakes area of California, where it operates a grocery store, a pet food and other businesses.
Sunlands stock plunged after the bankruptcy filing and had fallen nearly 10% in the past week.
It now trades at just $7.50 a share, down nearly a third from its peak of $23.30.
The company had been struggling with debt, low revenue and debt service since a bankruptcy auction in 2014.
SunLand had been seeking to restructuring and has been selling assets to raise cash, but has struggled with falling production, said Peter Henshaw, an analyst with Wedbush Securities.
Sun land is used in the production of many food products and has long been a favored supplier to the state of California.
The acquisition was part of a broader effort to restimulate the business and cut costs.
Henshaws forecast Sunland would post a $1.2 billion net loss.
“They’re a pretty big company, but I don’t think it’s a great deal for Sunland,” Henshushaw said.
The transaction was part a plan to refocus the company on its long-term plan to become a producer of fruits and vegetables.
The deal includes a $7 million cash infusion and a $10 million cash injection from Sunland’s pension funds.
The pension funds have invested more than $1 billion in Sunland in recent years, according to Sunland documents.
The purchase price includes the value of Sunland stock, which is now worth about $8 million.
Sun Land has struggled financially, but it is in good financial shape, said Brian McElroy, a senior vice president for corporate planning and sales at Sunland.
The sale will bring a significant boost to SunLand’s finances, he said.
Sun Lands stock has plunged more than 40% over the past year.
Sun Lake Farms is Sunland Farms’ biggest business, with about 2,000 employees and a market value of $2.8 billion, according a 2015 report from the California Department of Food and Agriculture.
Sun Lakes was the second-largest producer in Sun Lakes, behind Sunland, and the largest in Sun Lake, the report said.
About 8,700 employees work at Sun Lakes Farms, according the report.
Sun lands farm is in the same area as Sunland farms.
Sunlawn Farms, a smaller producer in California, also had about 2.4 million acres of land.
SunLawn Farms said in a statement that it has agreed to pay a $3.2 million payment to resolve the sale.
The settlement includes a commitment to make a $2 million cash payment to the California Public Employees Retirement System, the company said.