Tower Automotive looks to extend DIP facility, up interest rate

By Caroline Salls

Pittsburgh, Jan. 19 - Tower Automotive, Inc. requested court approval to amend its debtor-in-possession financing to extend the DIP facility and increase the interest rate, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company wants to extend the DIP facility to Aug. 2, 2007 from Feb. 2.

According to the motion, in light of continuing negative trends in the domestic automotive industry, including volume reductions announced by domestic original equipment manufacturers, the company will not be able to propose a plan of reorganization by the existing DIP deadline.

The amendment also provides that an event of default will occur under the DIP facility if Tower does not file a plan by May 2 that provides for payment in full of the DIP in cash on the effective date.

The DIP interest rate will be increased by 75 basis points on the revolving credit facility portion and by 100 bps on the term loan tranche.

The company will pay a waiver and amendment fee of 1% of the total commitments and a $500,000 arrangement fee.

A hearing is scheduled for Jan. 30.

Tower, a Novi, Mich.-based auto parts maker, filed for bankruptcy on Feb. 1, 2005. Its Chapter 11 case number is 05-10578.

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