Kansas City, Missouri, Apr 18, 2008 - Interstate Bakeries Corporation (IBC) today announced that it has executed a commitment for financing with certain of the existing lenders under its current debtor-in-possession (DIP) credit facility, other new lenders and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent for the lenders, that provides for an amended and restated credit facility to replace the current DIP credit facility, which expires on June 2, 2008. Under the terms of the commitment letter, the maturity of the DIP credit facility would be extended to September 30, 2008 and the amount available for borrowing under the DIP credit facility would be increased from $200 million to $250 million.
The commitment is subject to a number of conditions, including final documentation and Bankruptcy Court approval. Today, IBC filed a motion with the U.S. Bankruptcy Court for the Western District of Missouri seeking authorization to enter into the amended and restated DIP credit facility and requesting that a hearing on this matter be held on April 29, 2008, a date that had previously been held on the court's calendar. There can be no assurance that the Company will be able to obtain financing on the terms proposed in the amended and restated DIP credit facility, or at all.
The Company also announced that it has asked the Bankruptcy Court to continue its plan confirmation hearing, currently scheduled for April 23, 2008, to a date yet to be determined. The Company said that additional time is necessary for it to continue its ongoing discussions with multiple parties regarding modifications to its plan of reorganization, and related exit financing, that would allow IBC to emerge from Chapter 11 as a stand-alone company. This additional time is also needed for the Company to continue to pursue the on-going sale process which was initiated to sell all or portions of the Company's businesses and assets in the event that a stand-alone reorganization plan is not achievable. The Company intends to file further pleadings with the Bankruptcy Court regarding either of these options as appropriate.
About the Company
Interstate Bakeries Corporation is one of the nation's largest commercial bakers and distributors of fresh-baked bread and sweet goods, sold under various brand names, including Wonder(R), Merita(R), Home Pride(R), Baker's Inn(R), Hostess(R), Drake's(R), and Dolly Madison(R). The company is headquartered in Kansas City, Missouri.
Interstate Bakeries Corporation filed for bankruptcy protection on September 22, 2004, citing liquidity issues resulting from declining sales, a high fixed-cost structure, excess industry capacity, rising employee healthcare and pension costs, and higher costs for ingredients and energy. The Company continues to operate its business in the ordinary course as a debtor-in-possession.