Juul Shelves Bankruptcy Preparations With New Cash Infusion, Cuts Third Of Its Workforce

Some investors have invested in Altria Group Inc MO- backed Juul Labs Inc to stave off the proposed bankruptcy it had been preparing amid a dispute with the FDA over whether its products can remain on the U.S. market.
With the capital injection, Juul said it has stopped its bankruptcy preparations and is working on a cost-cutting program. Juul plans to lay off about 400 people and reduce its operating budget by 30% to 40%, Wall Street Journal reported.
The investment deal is the first piece of a bailout package under discussion with two of Juul’s top-notch investors, including Nick Pritzker and Riaz Valani.
The terms of the investment were not disclosed.
In a separate deal, the same two board members in late September refinanced a Juul term loan of between $300 million and $500 million, according to people familiar with the matter. Juul refinanced that debt because the terms of the previous loan required that Juul keep a high amount of cash on hand, and the company needed to access more of its cash.
As per WSJ, a second part of the bailout, which could cover near-term legal liabilities, is under discussion, citing people familiar with the matter.
Price Action: MO shares are up 0.20% at $44.31 during the premarket session on the last check Friday.