Interstate Bakeries is upbeat on its future prospects having emerged from Chapter 11 bankruptcy protection.
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After more than four years operating under bankruptcy protection, the maker of Wonder Bread and Twinkies exited Chapter 11 yesterday (3 January) when a US Bankruptcy Court in Kansas approved its reorganisation plan.
Under the plan, the company will be taken private, with private equity firm Ripplewood Holdings taking a 50% stake for US$130m.
Additional financing has been secured from Silver Point Finance, which will provide $339m, and a credit agreement with GE Capital, who will provide about $125m, the company revealed in a statement.
“This is a really positive change for the company because, first of all, we have got rid of the burden of having to deal with the Chapter 11 process… shedding some costs both in terms of time and money,” a spokesperson for Interstate told just-food.
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By GlobalData“More importantly, as part of the whole process we were able to negotiate significant changes in contracts with labour unions. These will increase productivity, reduce healthcare costs and give greater flexibility to deal with current market conditions.”
According to the spokesperson, in order to move the business forward, Interstate will increase its focus on innovation and product development.
“When you are introducing a new product, it takes a lot of money, and when you are in bankruptcy, you don’t have that kind of money. Interstate’s new access to capital will enable it to increase its focus on innovation,” the spokesperson said.
Interstate is preparing to launch a new line of all-natural, organic, artisan breads, the spokesperson revealed.
“Consumer tastes have changed quite considerable, at least in some parts of the US… With this new, completely natural, line we have figured out how to meet this demand on a mass produced basis.”
The new range will be introduced to selected markets under the Bakers Pride brand name “very shortly”, the spokesperson added.
