Just wanted to bring to your attention a possible MOMO play. I consider it a very high risk, but possibly rewarding at the same time. I made a very good profit off this just a short time ago with the problems they are having with finance wise. Symbol is " IBC " which is Interstate Bakeries Corp on the NYSE. They make twinkies, Wonder bread, Marrita Bread and more. This could go on the pinks or even a possible BK lurking in the future. I have played many of these companies with major problems and have been rewarded greatly on 90% of them, but have also been burt by a few in the past. Here is the last news which made it tumble and I expect it to possibly move even further down on some panic until news of their situation surfaces one way or the other. They have until the 26th to show their cards or may become delisted or worse. This was a $16.88 pps and now has dropped to an all time low of $3.47 as of yesterday. Be very careful with this play, because it is only for the investors that could make a lot or be willing to lose a lot overnight. September 13, 2004 11:18:00 (ET)
CHICAGO (CBS.MW) -- Shares of Interstate Bakeries were battered again Monday, losing nearly 11 percent after the company said that its bankers would continue to extend credit to the company -- but under some stiff new conditions including a higher interest rate.
Late Friday, Interstate (IBC, Trade) said that under an amendment to its revolving credit facility, is bank group would let it continue borrowing while it addresses the various issues that delayed the filing of its Fiscal 2004 Form 10-K with the Securities and Exchange Commission.
Under the amendment, the maker of Twinkies and Wonder Bread will have up to $255 million of availability on the revolving credit facility. But the amendment provides for a 0.5 percent permanent increase in it rate -- and Interstate will have to cough up the interest every month.
In addition, Interstate will have to deliver its fiscal 2004 financial statements and audit opinion by Sept. 26 and provide both a weekly cash-flow forecast and calculations showing compliance with the financial covenants under the facility.
If it fails to meet those conditions without waivers before the 26th or if it can't make a deal to for borrowing availability after that date, it "will have to seek alternative financing."
In that case, the company warned, "there can be no assurance that IBC would be able to obtain alternative financing under such circumstances and, if alternative financing is not available, the company will need to consider alternative courses of action that are typically considered by companies in similar circumstances."
Interstate was down 57 cents to $4.74, the latest phase of a pummeling that began in late August when the company said it would delay the filing of its fiscal 2004 numbers. In March, it was trading at $17; it scraped bottom at $4.50 on August 31
slides after new debt warning
September 13, 2004 10:21:51 (ET)
LOS ANGELES, Sept 13 (Reuters) - Shares of Interstate Bakeries Corp. (IBC,Trade) slid more than 12 percent on Monday after the company warned for the second time that it may be forced to seek "alternative courses of action" if it cannot meet new obligations to its creditors.
The maker of Hostess Twinkies and Wonder bread in a statement issued late Friday said its lenders have allowed additional borrowing on its revolving credit line but the facility requires the company to file its 2004 financial statements by Sept. 26.
Interstate Bakeries has delayed filing its annual report twice because of uncertainty over its upcoming financial results and whether it will be in compliance with certain debt covenants during its fiscal year 2005.
The company first warned it may have to consider alternatives for its business on Aug. 30, when it also said its auditors' report may raise questions about its ability to continue as a going concern.
Kansas City, Missouri-based Interstate Bakeries has been hurt by decreased demand for bread and pastries due to the popularity of low-carbohydrate diets.
In addition, the U.S. Securities and Exchange Commission launched an accounting probe into the company in July, looking into how it set workers' compensation and other reserves.
If the company is unable to meet the Sept. 26 deadline and other requirements, or obtain a waiver from its banks, Interstate said it would have to seek alternative financing, which it could not guarantee.
"If alternative financing is not available, the company will need to consider alternative courses of action that are typically considered by companies in similar circumstances," Interstate said in Friday's statement.
Analysts have raised the possibility that one of those alternatives could include Chapter 11 bankruptcy.
Interstate Bakeries also on Friday said it hired investment banking firm Miller Buckfire Lewis Ying & Co. to help evaluate strategic alternatives and in talks with its bank group.
Interstate Bakeries spokesman Mark Dirkes said crisis management firm Alvarez & Marsal, which the company said last month it hired to assist in its turnaround, is still working with the company.
Interstate shares were down 57 cents, or 10.7 percent at $4.74 in morning trade Monday on the New York Stock Exchange, where it was among the biggest losers on a percentage basis. The stock, which has lost nearly 70 percent of its value this year, hit a session low of $4.55.
Alverez and Marsal are the ones that turned around HLSH and many others to rebound back from the dead. They are experts at obtaining finacing for companies with major problems and working with bond holders, but if the situation is not viable, then they could reccomend BK, so be careful with your choice on this play if you take the high risk spec of making money. Good Luck, Walk
