Krispy Kreme lands $225 million financing deal

Monday, April 4th 2005, 9:37 am

By: News On 6

WINSTON-SALEM, N.C. (AP) _ Investment banker Credit Suisse First Boston is among a group of new lenders offering financially strapped Krispy Kreme Doughnuts Inc. $225 million in credit, the snack maker said Monday.

Silver Point Finance LLC and Wells Fargo Foothill Inc. also kicked in financing to help Krispy Kreme repay about $90 million the company had borrowed under a $150 million credit line extended by its long-standing lenders.

In trading Monday morning, shares of Krispy Kreme rose 27 cents, or 3.6 percent, to $7.75 on the New York Stock Exchange. The stock has traded in a 52-week range of $5.05 to $35.35.

Krispy Kreme's lenders this year had twice agreed to postpone a deadline by which the company would be in default on its credit line. The deadline was deferred last week to April 11.

The previous creditors were led by Charlotte-based Wachovia Corp., and also included North Carolina-headquartered BB&T Corp. and Bank of America Corp. The banks have had a lengthy relationship with Krispy Kreme and a history of supporting North Carolina companies.

``We are pleased to have found partners like CSFB and Silver Point who understand and believe in the power and potential of Krispy Kreme. With more liquidity and no near-term repayment deadlines, we look forward to getting back to the business of selling doughnuts and coffee,'' president and chief operating officer Steve Panagos said.

Panagos is also managing director of Kroll Zolfo Cooper, the corporate turnaround firm that took over after Krispy Kreme's directors ousted former chief executive Scott Livengood in January.

Krispy Kreme has been hit with several lawsuits, including one that alleges workers lost millions of dollars in retirement savings because executives at the company hid evidence of declining sales and profits.

Krispy Kreme also faces a criminal inquiry by a U.S. attorney in New York and an investigation by the Securities and Exchange Commission into financial irregularities.