Hawaii’s “gift to the world” is facing a dire need of redemption.

Hawaiian Host Inc., a 60-year-old kamaaina producer of chocolate-covered macadamia nuts largely enjoyed by tourists, has been one of Hawaii’s businesses hardest-hit by COVID-19 fallout.

The company that trademarked the phrase “Hawaii’s gift to the world” recently let vendors know it was seeking to settle past-due invoices for all its vendors at a discount — paying 75 cents on $1 — so that it could secure new investment capital and satisfy unpaid accounts.

In a letter last month explaining the offer, Hawaiian Host also said bankruptcy was the other option for the company with around 460 employees.

Many Hawaii companies, especially those heavily reliant on visitors for revenue, are facing perilous times as state and county government leaders plot a repeatedly delayed resumption of tourism that is now slated to begin Oct. 15 by welcoming visitors without a 14-day mandatory quarantine if they have a negative approved COVID-19 test within 72 hours of arrival.

The predicament of Hawaiian Host shows one particularly deep extent of that peril.

In the letter, Hawaiian Host noted that tourism accounted for 65% of its business, and that it couldn’t pay vendors on time because of the clampdown on the state’s biggest industry.

The letter from Hawaiian Host President and CEO Ed Schultz also said the company anticipated negative cash flow until Hawaii begins to receive at least 10,000 tourist arrivals daily.

Hawaii Tourism Authority data shows that total trans-Pacific air passenger arrivals have been around 2,000 a day over the last week, though the vast majority represents returning residents, air crews and military members while only around 60 to 100 people per day indicated the purpose of their trip was pleasure or vacation.

The critical financial position of Hawaiian Host follows receipt of a $5 million to $10 million forgivable federal Paycheck Protection Program loan in April and a $30 million sale and leaseback of its Honolulu production facility in June after a landmark acquisition of Hilo-based Mauna Loa Macadamia Nut Corp. five years ago for an undisclosed price.

Company officials did not respond to requests seeking comment on the recapitalization effort.

In an interview with Hawaii Business Magazine published June 18, Schultz discussed some operating pressures and adaptations amid the coronavirus pandemic.

According to the magazine, Schultz said he expected reduced tourism to last for the next three years and that Hawaiian Host was implementing unspecified cost-cutting initiatives while also shifting from a focus on high-volume product sales to products with higher profit margins and new products introduced to the local marketplace and the mainland.

Schultz also alluded to challenges ahead and tests of resilience, though the published interview did not mention debt restructuring.

“While we are confident in our ‘new normal’ course we have charted out, we also openly acknowledge it will not be all smooth sailing,” he told Hawaii Business.

Hawaiian Host claims to be the original producer of chocolate-covered macadamia nuts, producing more of the product at a premium quality level than anyone in the world.

The company’s founder, Mamoru Takitani, developed a unique recipe of blended chocolates with his wife, Aiko, in the attic of his parents’ Maui home in 1950 and created a “sensation” on the Valley Isle with chocolate-dipped macadamia nuts, according to Hawaiian Host.

Takitani established Hawaiian Host in 1960 in Honolulu after buying and renaming Ellen Dye Candies, a confectionery business established in 1927.

Milestones cited by the company in its history include revolutionizing the industry by dry-roasting mac nuts in 1975, and establishing a candy-making factory in California in 1980 to complement its Honolulu factory.

In 2015, Hawaiian Host bought Mauna Loa, a rival Hawaii mac nut snack maker from the nation’s biggest candy manufacturer, The Hershey Co., which spent $130 million to acquire Mauna Loa in 2004 when Mauna Loa had about $80 million in annual sales.

Hawaiian Host has maintained Mauna Loa as a subsidiary and separate brand since, but the consolidation has added to what Hawaiian Host is trying to sustain now amid COVID-19.

A month after Hawaii tourism restrictions were imposed in March, Hawaiian Host was among Hawaii companies receiving the biggest federal PPP loans aimed at helping struggling businesses with fewer than 500 employees.

Of roughly 25,000 Hawaii companies that received PPP loans, 20, including Hawaiian Host, got the biggest loans of $5 million to $10 million, as did the parent of Zippy’s restaurants, four hotel businesses and the owner of the Honolulu Star-Advertiser.

Hawaiian Host reported that its PPP loan on April 5 helped preserve pay for 460 employees.

Then in June, Hawaiian Host sold its Iwilei factory and headquarters complex for about $30 million with a provision to continue using the property under a long-term lease, according to sale records.

Such sale-leaseback deals are a way for companies to generate large sums of cash in the short term by selling real estate that they then must pay to use over the long term depending on how long they sustain the lease.

The lease for Hawaiian Host runs 25 years and is valued at about $26 million.

“In the near term, like most business here on the islands, this crisis has certainly taken a financial toll on us,” Schultz said in the Hawaii Business interview. “As an island community, we will need to take some risks in order to improve the struggling finances of many Hawaii companies, as very few have been insulated from the travel and tourism shutdown.”