IRVING, TEXAS — Hostess Brands Inc., which earlier this week filed for bankruptcy protection, said it has received authority from the U.S. Bankruptcy Court for the Southern District of New York to enter into a $75 million debtor-in-possession (DIP) financing facility and access $35 million of it until a hearing scheduled for Jan. 26 for further approval for the DIP. The financing will allow Hostess to continue routine operations while undertaking a comprehensive financial and operational restructuring.
The financing is being provided by a group of the company’s existing first-lien lenders, led by Silver Point Capital, L.P.
Additionally, Judge Robert D. Drain also authorized the continuation of wages for employees without interruption and maintenance of all customer programs, among other things.
“The motions granted today will ensure that Hostess continues its operations without any disruptions so that its products will remain available and on store shelves everywhere,” said Brian Driscoll, president and chief executive officer. “With the access to the DIP financing, Hostess will continue to provide wages and benefits to our employees and payments to suppliers going forward.”
The bankruptcy court said Hostess was focused on completing a successful reorganization and not on selling all or portions of the company.
“The company is strongly committed to continuing its good faith bargaining with its unions, and we remain hopeful that we can reach a consensual agreement on the terms of our labor contracts before filing 1113 and 1114 motions,” Mr. Driscoll said.