Concurrent with the filing, the company said that, subject to court approval, it has received a commitment for $75m in debtor-in-possession (DIP) financing from a group of its existing first-lien lenders, led by Silver Point Capital, LP.
The financing will enable the company to continue routine operations while undertaking a comprehensive financial and operational restructuring to transform it into a strong, competitive company. During the Chapter 11 proceeding, the company will continue operating its bakeries, outlet stores and distribution centres and delivering its products to its customers across the country.
The company does not anticipate any disruptions in the manufacturing and delivery of any of its bread or cake products. The company’s brands, including Wonder, Merita and Butternut breads, Drake’s, Twinkies and Hostess cakes, will still be available and on store shelves everywhere.
President and CEO, Brian Driscoll, said: “Hostess has some of our industry’s most powerful and resilient brands. With generations of loyal consumers, numerous iconic products and a talented and experienced workforce, Hostess Brands has tremendous inherent strengths to build upon.”
The company has requested the court to authorise certain actions, including entering into the DIP financing agreement, continuing wages for employees without interruption and maintaining all customer programmes.
The company also filed a procedures motion to establish a timeline for motions under Sections 1113 and 1114 of the Bankruptcy Code to address its labour agreements.
“Notwithstanding the procedures motion, we will do everything we can to reach a consensual agreement with our unions to modify our collective bargaining agreements,” Driscoll said. “We have engaged in good-faith bargaining with our labor partners for many months. We remain hopeful that we can reach an agreement that will allow us to amend our labor contracts so that we can emerge from Chapter 11 as a highly competitive company that provides secure jobs for our employees.”
Source: Hostess Brands
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