NEW YORK ( The Deal) -- Pipemaker Boomerang Tube LLC wants permission to drill into $145 million in debtor-in-possession financing to address its immediate liquidity issues.
The Chesterfield, Mo., company filed the DIP motion alongside its Chapter 11 petition in the U.S. Bankruptcy Court for the District of Delaware on Tuesday, June 9. Subsidiaries BTCSP LLC and BT Financing also filed petitions.
Judge Mary F. Walrath is scheduled on Wednesday to consider first-day motions, including requests for interim use of the DIP funding and for joint administration of the cases.
The post-petition financing would consist of a $60 million new-money term loan provided by a group of prepetition term lenders and an $85 million asset-based loan provided by Wells Fargo Capital Finance and Bank of America. Cortland Capital Market Services would serve as administrative agent on the term loan, while Wells Fargo would serve as administrative agent on the ABL.
The term loan would be priced at Libor plus 11% or an alternate base rate plus 10%, while the ABL would be priced at Libor plus 4.5% or a base rate plus 2.5%. The term loan would carry a 2% commitment fee and a $35,000 administrative agency fee. The ABL would have a $300,000 fee as well as an unused commitment fee of 0.375% to 0.5%, depending on usage of the loan.
The term loan DIP would mature on the earliest of Oct. 7, the sale of the debtor's assets and the effective date of a Chapter 11 plan. The ABL would mature on the earliest of Nov. 6, the closing of a sale of all the debtor's assets and a plan effective date.
The ABL gradually would roll up the $33 million outstanding on a prepetition revolver, and the term loan would repay a $6.6 million bridge loan provided by certain term lenders.
The DIP package would be the first step in a planned restructuring for Boomerang, also known as Oilfield Tubulars.
On Tuesday, the debtors and their prepetition lenders entered into a plan support agreement. The deal would cut Boomerang's funded debt obligations by converting the roughly $214 million in prepetition term-loan obligations into 100% of the reorganized debtor's common stock and $55 million in subordinated notes.
The term lenders also have agreed to backstop a $60 million exit facility that Boomerang would use to pay down the term loan DIP obligations. Those backstop lenders that agree to provide the exit facility would be entitled to up to 20% of the reorganized debtor's equity, which would dilute the stake held by all of the term lenders.
Boomerang as of Tuesday afternoon had not filed the PSA with the court or sought approval of the agreement.