Lenders cut I.B.C. credit by $10 million
October 03, 2007
by Eric Schroeder
KANSAS CITY — Interstate Bakeries Corp. on Wednesday said its lenders have cut the amount the company may borrow by $10 million.
The announcement was made as part of an Oct. 3 filing with the U.S. Securities and Exchange Commission in which I.B.C. amended its debtor-in-possession financing agreement with JPMorgan Chase Bank, N.A. and other financial institutions.
As part of the amendment, I.B.C. changed the borrowing base formula, effectively cutting the credit available to the company. There is the possibility the amount may be restored under some conditions, including if the U.S. Bankruptcy Court approves a reorganization plan that provides for full repayment, or if I.B.C. receives a binding commitment for exit financing for a reorganization plan.
The agreement requires I.B.C. to deliver to JPMorgan and others, on or before Dec. 1, a revised plan detailing the company’s strategy for maximizing the value of its assets, including the sale of the company or its assets.
In addition, the amendment included a change to I.B.C.’s cash restructuring agreement. The change allows the company to incur cash restructuring charges of up to $23 million in connection with consolidation of operations in Southern California announced in late August.