Source: Dow Jones Business Wire
 
Interstate Bakeries Corporation (NYSE:IBC) said today that, under a further amendment to its revolving credit facility, it has received a commitment from its bank group that clarifies its ability to continue borrowing while it addresses the various issues that delayed the filing of its Fiscal 2004 Form 10-K with the Securities and Exchange Commission. Under the amendment and subject to the conditions described below, the Company will have up to $255 million of availability on its revolving credit facility. Currently, there is $230 million outstanding under the revolving credit facility including the aggregate amount of outstanding letters of credit. Pursuant to the amendment, continued borrowings from and after September 26 require approval by two-thirds of the bank group.
 
"We are extremely pleased by the continued support of our bank group," said James R. Elsesser, chief executive officer of IBC. "The Company is continuing to sort through the issues raised in its August 30, 2004, news release with respect to its financial reporting systems. Our goal is to be able to file our Fiscal 2004 Form 10-K by the September 26 deadline."
 
The amendment provides a permanent increase of 0.50 percent in the interest rate on borrowings under the credit facility, with interest to be paid monthly. The Company's credit facility requires it to deliver to the banks its financial statements and related audit opinion for Fiscal 2004 on or prior to September 26, 2004. In addition, loans made after September 13, 2004, require the Company to provide a weekly cash flow forecast. Loans made after September 20, 2004, also require the Company to provide calculations showing compliance with the financial covenants under the credit facility. If the Company is not able to meet these conditions or receive appropriate waivers from the bank group at any time prior to September 26, 2004, or if the Company is not able to reach appropriate agreements with its bank group with respect to borrowing availability on and after September 26, 2004, it will have to seek alternative financing. There can be no assurance that IBC would be able to obtain alternative financing under such circumstances and, if alternative financing is not available, the Company will need to consider alternative courses of action that are typically considered by companies in similar circumstances.
 
In addition, IBC announced the engagement of Miller Buckfire Lewis Ying & Co., LLC to assist the Company in its discussions with the bank group and to identify and evaluate strategic alternatives. Miller Buckfire Lewis Ying is a nationally recognized investment banking firm providing strategic and financial advisory services in large-scale corporate restructurings, mergers and acquisitions and privately placed financing transactions.
 
Interstate Bakeries Corporation is the nation's largest wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder, Hostess, Dolly Madison, Baker's Inn, Merita and Drake's. The Company, with 55 bread and cake bakeries located in strategic markets from coast-to-coast, is headquartered in Kansas City, Missouri.