Beleaguered US doughnut maker and retailer Krispy Kreme has said that the lenders under its credit facility have agreed to give the company more time to file its financial statements and avoid defaulting.

The company now has until 25 March to deliver financial statements for the quarter ended 31 October 2004. After that date a default would occur if the company fails to deliver the statements. The previous deadline was this week.

Krispy Kreme, which last week appointed a new chief executive in a bid to turn its operations around, has blamed the popularity of low-carbohydrate diets for weak doughnut sales. In addition to financial troubles, the company is also facing an investigation by the US Securities and Exchange Commission and shareholder lawsuits.