I.B.C. inches closer to new credit deal
April 22, 2008
by Eric Schroeder
KANSAS CITY — Interstate Bakeries Corp. on Tuesday said it has reached agreement with a group of lenders led by JPMorgan Chase Bank, N.A., that will extend its key financing until Sept. 30.
As part of the agreement, I.B.C. said it has executed a commitment letter with its lenders that provides for an amended and restated debtor-in-possession (DIP) credit facility of $250 million that expires Sept. 30 to replace the $200 million DIP that expires on June 2.
I.B.C. estimated that fees totaling approximately $7.8 million would be incurred upon the effectiveness of the amended and restated DIP credit facility. A Bankruptcy Court hearing on the commitment letter is set for April 29.
I.B.C. first asked its lenders to increase the aggregate principal amount available under the DIP agreement to $250 million from $200 million on April 2. In exchange, I.B.C. said it would request proposals from interested buyers by April 21. In addition, I.B.C. agreed to deliver by June 30 a schedule of asset sales that the company believes will generate proceeds sufficient to reduce outstanding commitments under the DIP agreement to zero.