Ailing US baker Interstate Bakeries Corp. (IBC) is to give Mexico’s Grupo Bimbo access to the company’s books despite winning approval from a US bankruptcy court for its own survival plan.
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The court has given the green light to a deal between IBC and Silver Point Finance that will see the investment fund inject US$400m into the company when it emerges from Chapter 11.
IBC, which filed for bankruptcy three years ago, believes it can breathe life into the business with its reorganisation plan, which values the business at $580m.
CEO Craig Jung said he was “pleased” at the ruling and insisted that IBC’s plans would “allow our company to emerge from Chapter 11 and achieve sustainable profitability”.
However, the Teamsters union has attacked IBC’s plans, labelling them as “a recipe for another bankruptcy”. The union has backed a rival plan from Bimbo and investment fund Yucaipa Companies.
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By GlobalDataJung said IBC had agreed to allow Bimbo and Yucaipa to conduct due diligence on the business. However, the companies must table their proposal by 13 December or that access will end. Jung added that any rival plan must value IBC at over $580m.
“Now that the alternative proposal procedures are in place, we look forward to receiving proposals from other potential investors, including Yucaipa and Bimbo,” Jung said.
“All of our constituents can be reassured that an orderly process is in place to encourage competition among interested parties. This well conceived process provides the floor for value and a mechanism to consider whether further proposals provide greater value.”
