City Brewing Co., the La Crosse, Wisconsin-based contract manufacturer that produces White Claw hard seltzer and Pabst Blue Ribbon beer on behalf of brand owners, is seeking a new loan to improve its financial position. According to Bloomberg Law, the company is in talks with some of its lenders for a roughly $50 million loan that would shore up cash reserves as it struggles with lower demand and explores a potential restructuring—including a possible bankruptcy filing.
Here's what we know about City Brewing's financial situation and the path ahead.
The $50 Million Loan Talks
City Brewing is negotiating with lenders for approximately $50 million in new financing. The loan would provide liquidity as the company grapples with declining demand in the categories it serves—particularly hard seltzer, which has cooled significantly since its peak in the early 2020s. Bloomberg Law reported that negotiations are ongoing and no final decision has been made.
The company has already received bridge capital from lenders. Ion Analytics (Debtwire) reported that a group of lenders provided City Brewing with a $35 million super-senior priority term loan in early January 2025, a one-year bridge facility that carried a requirement for the company to form a board subcommittee to propose a restructuring plan by February 4, 2025.
Restructuring and Lender Takeover Discussions
As of March 2025, City Brewing is in discussions with creditors about an out-of-court restructuring that could result in lenders taking control of the company from current sponsors Charlesbank Capital Partners and Oaktree Capital Management. Bloomberg reported that negotiations are ongoing and no final decision has been made.
The company has retained advisers from prior restructuring efforts: Evercore and Sullivan & Cromwell are advising City Brewing, while Perella Weinberg Partners and Gibson Dunn & Crutcher are advising the lenders.
Why City Brewing Is Under Pressure
City Brewing's difficulties stem from several factors. First, hard seltzer demand has declined sharply since the category's boom years. The company was a major co-manufacturer for White Claw, but Mark Anthony Brewing—White Claw's owner—opened its own $490 million production facility and began shifting production in-house. That shift illustrates a core risk of the co-manufacturing model: when a customer grows large enough, it may insource production.
Second, the company took on substantial debt to expand capacity. A 2021 buyout and recapitalization included an $850 million term loan and a $630 million investment program aimed at doubling capacity to capitalize on craft beer and hard seltzer growth. When demand softened, the company was left with high fixed costs and underutilized facilities.
Third, City Brewing missed quarterly principal payments on its first-lien loans due December 31, 2024, and entered into a forbearance agreement with lenders. S&P Global downgraded the company's rating to SD (Selective Default) in January 2025.
What Happens Next
The $50 million loan—if completed—would provide breathing room as City Brewing and its creditors work through restructuring options. An out-of-court deal that transfers control to lenders could avoid a formal bankruptcy filing, though that outcome is not yet certain. For a company with over 150 years of history and facilities in La Crosse, Latrobe, Memphis, and Irwindale, the coming months will determine whether it can stabilize operations and return to sustainable footing.
Sources: Bloomberg Law; Bloomberg; Ion Analytics / Debtwire.
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