Optima Specialty Steel filed with the U.S. Bankruptcy Court a redacted motion for entry of an order authorizing the Company to (a) enter into an exit financing commitment letter and related fee letter with DDJ Capital Management; (b) incur and pay certain fees, indemnities, costs and expenses in connection therewith and (c) file the fee letter under seal. DDJ Capital Management is the lender; and the interest rate is LIBOR plus 10% per annum cash interest, subject to a 1% LIBOR floor (payable quarterly in arrears).
The motion explains, “The effective date of the plan of reorganization confirmed by the Court on June 29, 2017,4 has not occurred, and the exit financing commitment provided by GSO Capital Partners in connection with the Plan has expired. In light of the developments set forth in the Modification Motion, the Debtors have pivoted to DDJ Capital Management, to sponsor an alternative plan transaction that continues to provide for a comprehensive reorganization of the Debtors….The Debtors and their advisors, in consultation with the Modified Plan Support Parties, considered the funding, liquidity and optimal debt structure that will be necessary to consummate the Modified Plan.”
In addition, “Ultimately, the Debtors and their advisors, in consultation with the Plan Support Parties, determined the Debtors would require aggregate debt financing of $240 million to consummate the Modified Plan and provide sufficient liquidity to fund the Debtors’ operations after emergence from these Chapter 11 Cases, all in the form of the Exit Facility. To the extent the Debtors’ cash balances exceed $10.0 million as of the Closing Date, the Commitment Amount shall be reduced dollar-for-dollar.” The Court scheduled a September 27, 2017 hearing to consider the exit financing facility, with objections due by September 26, 2017.
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