Tasty Baking secures new financing
By Bakers Journal
By Bakers Journal
January 18, 2011, Philadelphia – Tasty Baking Company has reached an agreement for $6.5 million in new public and private financing.
The company has also amended its credit agreement with its bank group, deferring all principal payments and credit facility reductions until June 30. The amendment waives certain defaults, changes the maturity date to June 30, amends certain financial covenants and establishes additional covenants. These include imposing minimum cash balances and prohibiting the payment of any dividends on the company’s common stock, also until June 30.
“We are pleased that we have secured this new financing and the amendments,” said Charles P. Pizzi, president and chief executive officer of Tasty Baking Company. “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.”
The debt financing secured by Tasty Baking comes from several sources. Philadelphia Industrial Development Corporation will contribute $2 million, while the Department of Community and Economic Development of Pennsylvania will contribute $1 million. A group of accredited investors will contribute an additional $3.5 million in financing.
Moving forward, Pizzi said that the company would “remain focused on operation efficiencies, growing the business and continuing to produce, distribute and sell Tastykake products to our customers and consumers.”