Tasty Baking Co. has a lot more problems than just working out the kinks in its new production facility at the Philadelphia Navy Yard.
On Wednesday, the snack-food maker that the expected cost savings from the new bakery is being cut from $13 million to $10 million. Also, the rise in commodity costs and the bankruptcy of Great Atlantic & Pacific Tea Co. Inc. are causing "extremely tight liquidity" at Tasty Baking.
Now the maker of Kandy Kakes and Krimpets is talking with its lenders, including Citizens Bank, about increasing its line of credit. Tasty Baking's bank group has agreed defer all principal payments and reductions in its credit facility until Jan. 14, the company said in a statement.
But the bigger bombshell is that Tasty Baking has retained Philadelphia's Janney Montgomery Scott L.L.C. as its financial advisor to evaluate any and all options, one of which could be "a potential sale" company.
It's a huge setback for a company that last spring was celebrating the move of its bakery from Hunting Park to South Philadelphia.
Tasty Baking said it will continue to operate its two bakeries. (The other is in Oxford, Chester County.)