OFS International seeks $1.5 million of additional DIP financing

By Sarah Lizee

Olympia, Wash., Oct. 27 – OFS International, LLC is seeking court approval to obtain an additional $1.5 million of debtor-in-possession financing, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

The company said that on Oct. 21, it fully paid the balance of its existing $16.5 million DIP financing.

OFS said it needs the additional liquidity in order to make three purchases of pipe inventory, which are required to complete pending jobs.

“Revenue from those jobs is due before the end of November, prior to the effective date, and the debtors expect that the balance on the DIP loan will again be zero dollars prior to the effective date,” the company said.

The company and DIP lender Sandton Capital Solutions Master Fund V, LP have reached an agreement whereby the DIP lender will consent to an amended budget consistent with the debtors’ cash needs for this period, which includes the additional $1.5 million in disbursements for the pipe purchases.

In exchange, the debtors will pay the DIP lender a fee of $50,000.

As previously reported, the original DIP financing consists of a $12.5 million DIP revolving ABL facility and an up to $4 million DIP term loan.

The DIP credit facilities provide for a creeping roll up of Sandton’s pre-petition secured debt.

The maturity date is Dec. 31. Interest is 11%, with 5% paid in kind and 6% in cash.

The Houston-based company provides oil company tubular goods and services. The company filed bankruptcy on May 31 under Chapter 11 case number 21-31784.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.