Aceto seeks court approval of cash collateral use, DIP financing

By Sarah Lizee

Olympia, Wash., Feb. 21 – Aceto Corp. is seeking authorization to use cash collateral and obtain post-petition financing under a debtor-in-possession credit facility, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the District of New Jersey.

“Immediate approval of the use of cash collateral and the DIP facility is absolutely necessary and critical to the debtors’ ability to maintain their operations pending the effectuation of the proposed value-maximizing sale transactions, thus avoiding an immediate and disorganized liquidation,” the motion said.

As previously reported, the company is seeking interim access to $15 million of a $60 million secured super-priority DIP credit facility provided by a syndicate of lenders led by Wells Fargo Bank, NA.

According to the motion, the DIP facility includes $37 million of revolving commitments, as well as a limited roll-up of $23 million in additional revolving loans that the company may request and prepetition lenders agreed to provide under a January amendment to its existing revolver.

The financing will mature on June 7. The maturity date is subject to extension by 30 days upon agreement by the required lenders.

Interest will accrue at Libor plus 700 basis points.

There is a $1.75 million sub-limit for letters of credit.

Currently, the company has $85 million of revolving loans outstanding that bear interest at Libor plus 950 bps to 1,150 bps and $120 million of term loans outstanding that bear interest as an alternate base rate loan at 11.5%.

The company also has $143.75 million of 2% convertible senior notes due 2020 outstanding.

Aceto is a Port Washington, N.Y.-based developer, marketer, seller and distributor of human health products, pharmaceutical ingredients and performance chemicals. The company filed bankruptcy on Feb. 19 under Chapter 11 case number is 19-13448.

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