PSL-North America files bankruptcy, gets $100 million offer for assets

By Caroline Salls

Pittsburgh, June 16 – PSL-North America LLC filed Chapter 11 bankruptcy on Monday in the U.S. Bankruptcy Court for the District of Delaware amid plans to sell substantially all of its assets.

PSL said financial and operational difficulties have resulted in significant deterioration of its revenue, profitability and liquidity since operations began.

Jindal Tubular USA LLC is the stalking horse bidder for the company’s assets with a $100 million proposed purchase price. Liabilities to be assumed under the proposed asset purchase agreement include the company’s obligations under $76.8 million in outstanding tax-exempt and taxable variable-rate demand revenue bonds issued by the Mississippi Bank Finance Corp.

Under the bidding procedures, the sale must close by Aug. 31.

If the agreement with Jindal is terminated, it will receive a $3 million termination fee and an up to $500,000 expense reimbursement.

Competing bids are due by 5 p.m. ET on Aug. 11 and must be more than the sum of the stalking horse bid, including a $2.2 million success fee due Duff & Phelps Securities, LLC, plus the termination fee, expense reimbursement and a $500,000 overbid amount.

DIP financing

In connection with the bankruptcy filing, PSL obtained a commitment for $11.5 million in debtor-in-possession financing from Icici Bank Ltd., New York Branch.

Interest will be Libor plus 550 basis points.

The facility will mature on the earlier of Sept. 30 and the closing of the asset sale. However, no draws can be made on the post-bankruptcy facility after Aug. 31.

The company is seeking interim access to $5.5 million of the DIP financing.

Debt details

According to court documents, PSL has $50 million to $100 million in assets and $130 million in debt.

The company’s largest unsecured creditors are:

• AM/NS Calvert, LLC of Calvert, Ala., with a $5.32 million trade debt claim;

• PSL Ltd of Mumbai, with a $4.81 million machinery and equipment/spare parts claim;

• CSX Transportation, based in Atlanta, with a $4.08 million trade debt/note payable claim;

• Export Import Bank of India, based in Mumbai, with a $1.37 million bank loan claim; and

• Hanwa American Corp. of Houston, with a $1.29 million note payable claim.

PSL USA Inc. owns 83% of the company’s equity, HSAW Solutions, LLC owns 9%, and Lloyd Systems, Inc. owns 8%.

The company is represented by Richards, Layton & Finger, PA.

Bay St. Louis, Miss.-based PSL-North America is a subsidiary of PSL Ltd., a Daman, India, pipe manufacturer. The Chapter 11 case number is 14-11477.

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