Twinkies are out of bankruptcy
http://www.businessweek.com/ap/financialnews/D964DCLG0.htm
Twinkie-maker Interstate Bakeries exits bankruptcy By DAVID TWIDDY KANSAS CITY, Mo. The maker of Hostess Twinkies and Wonder Bread has emerged from more than four years of bankruptcy. Kansas City-based Interstate Bakeries Corp. said Tuesday that it has begun implementing its court-approved reorganization plan, which provides almost $600 million in post-bankruptcy financing. Under the plan, a group of lenders and investment firm Ripplewood Holdings are splitting ownership of the company and taking it private. Current shareholders got nothing for their shares, which were canceled in a series of securities filings earlier Tuesday. "Today marks a new beginning for Interstate Bakeries," Chief Executive Craig Jung said in a statement. Interstate Bakeries filed for Chapter 11 protection from creditors in September 2004, blaming low sales and high fixed costs. Since then, it has closed about a dozen bakeries, eliminated 7,000 jobs and shuttered numerous distribution depots and thrift stores. Richard Volpe, director of the International Brotherhood of Teamsters' Bakery and Laundry Conference, welcomed the news. The Teamsters represent about 10,000 of the company's employees and brought Ripplewood into the process after the union helped scuttle an earlier reorganization plan. "The Teamsters union fought hard to save good-paying jobs at the company," Volpe said. "I am proud of the battle we waged for 4 1/2 years to see this company survive." The company still faces an uphill climb after it lost $143.7 million last year as revenue fell 3.4 percent to $2.8 billion. It has lost another $78.3 million in the first half of fiscal year 2009, with sales declining 2 percent to $1.3 billion. But Jung, a food industry veteran brought in to run the company a little more than a year ago, has outlined changes to the company's sales and distribution models, as well as increased focus on developing new products, which he says will make the company more efficient. Also, the company, with 22,000 employees, has taken steps to leave markets it said were less profitable. "We are now a stronger and more competitive company," Jung said. The reorganization plan provides $354 million in financing from Silver Point Finance and Monarch Master Funding Ltd., as well as a revolving loan of $105 million from General Electric Capital Corp. Ripplewood is investing $44.2 million in cash and $85.8 million in convertible debt in exchange for a 50 percent stake in the new company and an opportunity to later acquire an additional 15 percent.
