Gottschalks granted final approval of $125 million DIP loan

By Jennifer Lanning Drey

Portland, Ore., Feb. 13 - Gottschalks Inc. received final approval of its $125 million debtor-in- possession revolving credit facility Thursday from the U.S. Bankruptcy Court for the District of Delaware, according to an attorney.

As previously reported, the DIP financing will be provided by a group of lenders led by General Electric Capital Corp.

The financing will be used to fund the company's working capital requirements, including employee wages and benefits, vendor payments and other operating expenses, during the reorganization process.

The DIP financing will expire at the earliest of July 2009, the close of the first business day after final approval if the required fees have not been paid, the date of confirmation of a plan of reorganization that does not call for the loan to be paid in full, upon closing of a sale of substantially all company assets and either on the effective date of a plan of reorganization that does repay the loan in full or 60 days after confirmation if the effective date has not occurred.

Interest will be Libor plus 400 basis points.

Gottschalks will pay a 2% closing fee.

Gottschalks, a Fresno, Calif.-based regional department store chain, filed for bankruptcy on Jan. 13 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-10157.

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