PHILADELPHIA -- Tasty Baking Co. said that it has reached agreement for new public and private debt financing comprised of $2 million from the PIDC Local Development Corp. (PIDC), $1 million from the Department of Community & Economic Development of Pennsylvania (DCED) and $3.5 million from a group of accredited investors.
Additionally, the company entered into an amendment to its credit agreement with its bank group led by Citizens Bank pursuant to which the bank group agreed to defer until June 30, 2011, all principal payments and credit facility reductions. This [image-nocss] amendment also waived certain defaults, changed the maturity date to June 30, 2011, amended certain financial covenants and established additional covenants, including, among other things, imposing until June 30, 2011, minimum cash balances and prohibiting the payment of any dividends on the company's common stock.
It also requires the company pursue consummating the sale or merger of the company by June 30, 2011.
In addition, the lenders for the company's loans from the PIDC and DCED, along with the landlords for the company's leases at the new bakery and its office headquarters in Philadelphia, have also agreed to defer until June 30, 2011, certain payments due under their loans and leases.
Charles P. Pizzi, president and CEO of Tasty Baking, said, "We are pleased that we have secured this new financing and the amendments. We believe that the new funds will enable the company to manage cash flow and deal with its tight liquidity situation as the company continues its evaluation of possible financial and strategic alternatives which, in addition to a possible sale or merger of the company, include the possibility of refinancing the company's long term debt or raising additional capital. As we pursue our options, we remain focused on operational efficiencies, growing the business and continuing to produce, distribute and sell Tastykake products to our customers and consumers."
Tasty Baking, founded in 1914 and headquartered in Philadelphia, is one of the country's leading bakers of snack cakes, pies, cookies and doughnuts with manufacturing facilities in Philadelphia and Oxford, Pa. The company offers more than 100 products under the Tastykake brand name.
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