OSG gets quick access to DIP loan; plan, statement hearing scheduled

By Sarah Lizee

Olympia, Wash., Aug. 10 – OSG Group Holdings, Inc. received interim approval to access $7.5 million in new money and $10.4 million in rolled-up debt that is part of a proposed junior debtor-in-possession facility, according to an interim order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

Following entry into a final order, the company will have access to the entire $26.26 million facility, consisting of $15 million in new money term loans, plus commitment fees, and $10.4 million in rolled-up term loans, plus accrued interest from June 1 through Aug. 9.

On the effective date, the new-money term loans will convert into new equity investment in exchange for the issuance of 28.8% of new convertible preferred equity, and $1.87 million in principal amount of new mezzanine debt loans in respect of accrued interest on the rolled-up DIP term loans.

The financing is being provided by prepetition second-lien lenders. Wilmington Trust, NA is the administrative and collateral agent.

The DIP facilities bear interest at SOFR plus 1,200 basis points per annum, all of which is paid in kind. The 4% commitment fee on the new-money loans is also payable in kind.

Confirmation hearing

In addition to the interim DIP order, the company obtained an order scheduling a combined hearing on final approval of its disclosure statement and confirmation of its pre-packaged Chapter 11 plan.

The hearing is scheduled for Aug. 29. The court will also consider final approval of the DIP financing at the hearing.

As previously reported, the company’s proposed expedited confirmation timeline drew an objection from Regions 3 and 9 U.S. trustee Andrew R. Vara, who had said that equity holders should be given more time to consider the plan.

OSG is a Ridgefield Park, N.J.-based provider of omnichannel billing and payment solutions, customer engagement and critical customer communication management. The company filed bankruptcy on Aug. 6 under Chapter 11 case number 22-10718.

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