Optima Specialty Steel filed with the U.S. Bankruptcy Court a motion for entry of an order authorizing Debtors’ entry into and performance under a plan support agreement between the Debtors and Optima Acquisitions (OA) and approving related expense reimbursement.
The PSA notes, “Specifically, the PSA obligates OA, which is the sole shareholder of Debtor Optima Specialty Steel (OSS), to fund the Debtors’ Chapter 11 reorganization plan with a $200 million cash contribution (the ‘OA Cash Contribution’). The Agreed Plan commits the Debtors to raise an additional $100-110 million exit financing term loan and a $30 million exit financing revolver, commitments for which will be obtained from one or more third parties by the Debtors’ investment banker, Miller Buckfire & Co. The $200 million OA Cash Contribution and the $130-140 million of aggregate exit financing will fund the Agreed Plan that will provide unimpaired treatment to all creditors and leave OA (as sole shareholder) unimpaired. In return for the $200 million OA Cash Contribution, OA will retain its existing 100% equity interest in OSS….The $200 million OA Cash Contribution will significantly deleverage the Debtors’ capital structure. OA’s $200 million ‘new money’ equity investment in OSS will provide a smooth and predictably successful path for the Debtors to raise exit financing and confirm the ‘100 percent’ Agreed Plan that leaves all creditors unimpaired.” The Court scheduled a May 10, 2017 hearing to consider the PSA, with objections due by May 3, 2017.
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