Dura gets court approval to amend DIP covenants

By Reshmi Basu

New York, June 28 - Dura Automotive Systems, Inc. received court approval to amend some of the covenants under its debtor-in-possession financing, according to documents filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Dura asked to modify its DIP financing to provide more financial flexibility to the company while it negotiates the terms of a plan of reorganization.

The original DIP budget was prepared under an expedited 2007 annual planning process when the company first filed for bankruptcy. Since then, Dura said it has been able to complete a comprehensive review and reforecast for 2007.

Among the DIP changes, the minimum EBITDA requirement will be reduced for the period of May through August; baskets for allowed non-guarantor receivables factoring and sale leaseback transactions will be combined; non-guarantors can obtain up to $5 million in cash collateralized letters of credit; and the company can return up to $1.45 million in funds received from a non-debtor Brazilian affiliate as pre-payment under an existing inter-company loan.

Dura will pay up to $300,000 in DIP amendment fees.

Dura, a Rochester Hills, Mich.-based automotive parts maker, filed for bankruptcy on Oct. 30, 2006. Its Chapter 11 case number is 06-11202.

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