Progrexion gets approval of DIP financing package, bid procedures

By Sarah Lizee

Olympia, Wash., Aug. 4 – PGX Holdings, Inc., which does business as Progrexion, received final approval of a debtor-in-possession financing package from prepetition secured lenders, as well as approval of the bid procedures for its assets, according to orders filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

Financing

Progrexion has about $423.5 million of total funded debt, including $243.5 million under a first-lien term loan with Blue Torch Finance LLC as administrative agent and $180 million under a second-lien term loan with Prospect Capital Corp., as lender and majority equity holder.

The DIP facility includes a $19.925 million new-money commitment, including $12 million of availability that was previously approved on an interim basis, and has a 105-day maturity.

The DIP facility also includes a $42.75 million roll-up of prepetition debt, including $2.9 million of emergency bridge financing provided during the week prior to the petition date.

Interest on the new money and the $2.9 million amount is 8˝% per annum. Interest on the remaining amount of the rollup is the same as under the prepetition first-lien agreement.

There is a 3.5% closing fee and a $75,000 agent fee.

The company also received final approval to use the cash collateral of its prepetition secured lenders.

Bid procedures

The company plans to sell substantially all of the debtors’ assets and has lined up two stalking horse agreements.

The first is with the prepetition and DIP lenders, who seek to purchase all assets except those of Lexington Law for $257.49 million, consisting of a credit bid and assumed liabilities.

The second stalking horse agreement is with the owners and the principal attorney at Lexington Law for substantially all of the Lexington Law assets.

The two agreements are conditioned on each other and are intended to permit the debtors’ businesses to continue as a going concern.

Under the bid procedures, the bid deadline is 5 p.m. ET on Aug. 11, an auction is scheduled for Aug. 15, and a sale hearing will take place on Aug. 25.

Progrexion is a provider of consumer credit repair services based in Salt Lake City. The company filed bankruptcy on June 4 under Chapter 11 case number 23-10718.

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