Louisiana Pellets seeks court approval of $2.65 million DIP facility

By Caroline Salls

Pittsburgh, March 15 – Louisiana Pellets, Inc. requested court approval to access up to $2.65 million in debtor-in-possession financing from bond trustee UMB Bank, NA, according to a motion filed Monday with the U.S. Bankruptcy Court for the Western District of Louisiana.

Louisiana Pellets said the $2.65 million in financing would be provided on an interim basis. Additional amounts are possible under a final order.

According to the motion, the proposed financing will cover a 30-day period for payment of necessary preservation and maintenance of the company’s facility, including charges for powering on the main electrical supply to the facility, as well as payment of payroll, insurance and other basic preservation and maintenance expenses.

Louisiana Pellets said the bond trustee may provide further financing under a final order for a longer “restart” period during which the facility may restart production so that it can begin to realize production income.

The company said the details of the restart budget are being discussed, and there is no commitment on the part of the bond trustee to fund any amounts under the restart budget.

The DIP facility will not accrue interest. The facility will mature on the earlier of April 18 and occurrence of an event of default.

Louisiana Pellets, a Urania, La., wood pellets manufacturer, and German Pellets filed bankruptcy on Feb. 18 under Chapter 11 case number 16-80162.

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