Interstate Bakeries Corporation (IBC) has filed a motion with the US Bankruptcy Court in a bid to sign a deal to receive US$400m in exit financing upon its emergence from Chapter 11.

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The ailing US baker is looking to sign the deal with Silver Point Finance LLC. In addition, the company said in a statement, that it is also seeking court permission to enter into a plan funding agreement with creditors JP Morgan Chase Bank, N.A., McDonnell Investment Management LLC, Quadrangle Master Fund Ltd., and Silver Point Capital, L.C. (the Plan Supporters).


The company has requested that the Bankruptcy Court schedule a hearing on the motion for 7 November, which is the same day that IBC’s continued motion to extend the period in which it has the exclusive right to file and solicit acceptances of a plan is scheduled to be heard.


Under the plan funding agreement, the plan supporters have agreed to convert approximately $218m of funded pre-petition senior secured debt into new debt and equity securities to be issued upon the company’s emergence from Chapter 11.


Both deals are subject to getting union backing. The company said that it had reached agreement with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union leadership in September.

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“The company continues to bargain with the International Brotherhood of Teamsters (IBT), but has not yet reached agreement with IBT leadership on all contract changes necessary to implement IBC’s business plan and fulfil the requirements of Silver Point’s financing commitment,” a statement said.


“The plan funding agreement and exit financing commitment together mark an important milestone for IBC. Silver Point’s $400m capital commitment to our company sets the foundation for achieving a rational capital structure to support the company’s business plan and allow IBC to emerge from Chapter 11 with sufficient liquidity to compete in the marketplace,” said Craig Jung, IBC’s CEO.


“But, we have very little time left to reach a mutually acceptable agreement with the Teamsters in order to save our company and our jobs. Now is clearly the time for Teamsters’ union leadership to recognise that the livelihood of 25,000 families rests squarely on their shoulders.”