May 19, 2020 – The Debtors requested Court authority to (i) access $40.0mn of debtor-in-possession (“DIP”) financing, to be provided by BTC Holdings Fund I, LLC and certain of the Debtors’ prepetition secured lenders ( the “DIP Lenders”) and agented by Blue Torch Finance LLC, and (ii) use cash collateral [Docket No. 26].
The motion states, “The DIP Financing and use of cash collateral provides the Debtors with necessary liquidity, on reasonable terms and customary budget covenants. The relief sought in this Motion is critical for the Debtors to pay their ordinary-course operating expenses, finance these chapter 11 cases, pursue the Sale Process (as defined herein) and maximize value and the opportunity to protect the interests of their approximately 2,400 employees.
The Debtors are entering chapter 11 with limited available liquidity, which is significantly below the optimal level required to preserve the value of the Debtors’ business operations in the ordinary course. Prior to the Commencement Date, the Debtors, in consultation with their advisors, reviewed and analyzed the Debtors’ projected cash needs and prepared an Initial DIP Budget outlining the Debtors’ post-petition cash need in the initial thirteen weeks of the chapter 11 cases. The DIP Financing will provide the Debtors with the liquidity necessary to, among other things, make payroll and satisfy their other working capital and general corporate purposes, including essential payments to vendors and service providers.”
Key Terms of the DIP Facility:
- Borrowers: Exide Technologies, LLC (“Borrower”)
- Guarantors: Exide Holdings, Inc. (“Holdings”), Dixie Metals Company, Refined Metals Corporation and Exide Delaware LLC (collectively, the “Guarantors”).
- DIP Lenders: Blue Torch and certain members of the Ad Hoc Group.
- Administrative Agent: Blue Torch Finance LLC
- Borrowing Limits: $40.0mn Super Priority DIP Term Loans comprised of:
- A $25.0mn First-Out Loan provided by Blue Torch
- A $15.0mn Last-Out Loan provided by existing noteholders
- Interest Rate:LIBOR plus 10.00% (with a 2.00% LIBOR floor), calculated on the basis of the actual number of days elapsed in a 360-day year, comprised of a blended rate of:
- LIBOR + 9.00% for the First-Out
- LIBOR + 11.67% for the Last-Out
- Fees:
- Upfront Fee: 3.5% of the Credit Facility initial amount comprised of a blended rate of: (i) 2.5% for the First-Out and (ii) 5.167% for the Last-Out
- Exit Fee: 3.5% of the Credit Facility initial amount if, prior to the Maturity, the DIP Term Loans are prepaid, repaid, refinanced or replaced or accelerated (including the acceleration of the DIP Loans after an Event of Default), comprised of a blended rate of: (i) 1.5% for the First-Out and (ii) 6.833% for the Last-Out
- Maturity Date: Upon the earliest of: (a) six months from closing; (b) conversion of any of the Debtor’s chapter 11 cases to a case under chapter 7; (c) dismissal of the Debtors’ chapter 11 cases; (d) appointment of a chapter 11 trustee, examiner, or other fiduciary with decision making authority; (e) the effective date of the Debtor’s chapter 11 plan; (f) the closing date of a Sale Transaction; (g) failure to timely satisfy milestones with respect to the Sale Transaction (including, but not limited to, approval of sale procedures, designation of a stalking horse bidder, entry of a sale order and closing); (h) upon the consummation of any credit bid transaction involving the sale of any Americas Assets; (i) upon the election of the Required Lenders after an Event of Default; (j) any action by the Debtors to challenge, support or encourage a challenge of, or fail to oppose a challenge of (A) any payments made to the DIP Lenders or to the Prepetition Secured Noteholders or (B) the validity or enforceability of any of the DIP Loan Documents, the legality, validity or enforceability of any of the DIP Term Loans or obligations to the Prepetition Secured Noteholders; and (k) other maturity date triggers as are customary for debtor-in-possession financings and satisfactory to BTC, including failure to satisfy specified milestones with respect to the chapter 11 cases, to be agreed.
- Milestones:
- Deadline to file the Bidding Procedures Motion: Not later than 3 business days after the Commencement Date;
- Deadline to obtain entry of interim order approving the DIP Facility: Not later than 3 business days after the Commencement Date;
- Deadline to designate a Stalking Horse bid for the Americas Assets acceptable to the DIP Lenders: Not later than 24 days after the Commencement Date;
- Deadline to file the Plan and Disclosure Statement: Not later than 30 days after the Commencement Date
- Deadline for entry of an order approving the Bidding Procedures: Not later than 30 days after the Commencement Date
- Deadline for entry of a final order approving the DIP Facility: Not later than 35 days after the Commencement Date
- Deadline to commence the Auction: Not later than 60 days after the Commencement Date
- Deadline for entry of an order approving the Disclosure Statement: Not later than 75 days after the Commencement Date
- Deadline for entry of a sale order approving the Sale Transaction: Not later than 75 days after the Commencement Date
- Deadline to consummate Americas Sale Transaction: Not later than 100 days after the Commencement Date
- Deadline to consummate Europe/ROW Sale Transaction: Not later than 120 days after the Commencement Date
- Deadline to commence the Confirmation Hearing: Not later than 120 days after the Commencement Date; and
- Deadline for Effective Date under the Plan to Occur: Not later than 135 days from the Commencement Date.
Prepetition Indebtedness
As at filing, the Debtors, together with their non-Debtor affiliates, had outstanding funded debt obligations in the amount of approximately $817.4mn in the aggregate, summarized in the following chart:
|
Instrument / Facility |
Principal Outstanding |
|
ABL Credit Agreement |
$101,200,000 |
|
10.75% Superpriority Lien Senior Secured Notes due 2021 |
$152,513,000 |
|
11.0% Exchange Priority Notes due 2024 |
$390,000,000 |
|
11.0% First Lien Senior Secured Notes due 2024 |
$161,023,000 |
|
Total Secured Debt |
$804,736,000 |
|
3.79% Deferred Payment Notes due 2022 |
$2,700,000 |
|
11.0% Unsecured Notes due 2020 |
$9,000,000 |
|
11.0% Unsecured Notes due 2022 |
$1,000,000 |
|
Total Unsecured Funded Debt |
$12,700,000 |
|
Total |
$817,436,000 |
About the Debtors
According to the Debtors: “For more than 130 years, Exide Technologies, LLC (exide.com) has been Powering the World Forward as a global provider of stored electrical-energy solutions for the Transportation and Industrial markets. Headquartered in Milton, Georgia, Exide operates in 80 countries with more than 8,000 employees. Exide produces a range of battery and energy storage systems and specialty applications for the Transportation, Network Power and Motive Power markets and industries including agricultural, automotive, electric, light and heavy-duty truck, marine, materials handling, military, mining, power-sport, railroad, security, telecommunications, utility a
Read more Bankruptcy News
The post Exide Holdings, Inc. – Seeks Access to $40mn of DIP Financing, Terms Include Interest and Fees Nearing 20% and Aggressive Sales Milestones appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.