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Ormet seeks DIP amendment for $10 million of supplemental financing
By Jim Witters
Wilmington, Del., Aug. 16 - Ormet Corp. is seeking approval for $10 million in additional financing under an amendment to its debtor-in-possession term loan credit agreement, according to an Aug. 15 filing with the U.S. Bankruptcy Court for the District of Delaware.
The court granted final approval for Ormet's $30 million DIP facility on March 22.
The company says it needs the additional financing to fund operations while awaiting the closing of the $130 million sale of substantially all of its assets to stalking horse bidder Smelter Acquisition LLC.
The closing has been delayed while the Public Utilities Commission of Ohio ponders Ormet's request for modifications to its power supply agreement with the Ohio Power Co., doing business as AEP Ohio.
PUCO has scheduled an Aug. 27 hearing on Ormet's request. Ormet believes a decision may not be issued until late October.
The proposed amendment would provide:
• A total delayed-draw term loan of $25 million, of which $10 million is the supplemental financing;
• The release of the DIP term loan agent, the DIP term loan secured parties and certain other related parties by each borrower; and
• The revolving DIP loan credit agreement and the intercreditor agreement will be amended to permit the supplemental financing, with the revolving loan secured parties making available $4 million of additional liquidity by removing or modifying provisions of the credit agreement.
The total amount of the DIP loan agreement will increase to $40 million, of which $15 million was initially drawn under the term loan agreement and $15 million was drawn as delayed draws.
No hearing has been scheduled to consider the DIP amendment.
Ormet, a Hannibal, Ohio-based producer of aluminum, filed for bankruptcy on Feb. 26. The Chapter 11 case number is 13-10334.
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