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Contec Holdings seeks approval for DIP facility, plan confirmation date
By Jim Witters
Wilmington, Del., Aug. 30 - Contec Holdings, Ltd. is seeking approval of $35 million of debtor-in-possession financing to fund the company during its bankruptcy proceedings, according to an Aug. 29 filing with the U.S. Bankruptcy Court for the District of Delaware.
The proposed financing facility includes a $7.5 million letter of credit and $27.5 million of revolving credit.
The interim borrowing limit is $20 million.
Barclays Bank plc is administrative and collateral agent.
The DIP facility would mature on the earliest of Nov. 30; the date 35 days following the interim DIP order, if no final order is entered; the effective date of the acceptable reorganization plan; or the acceleration of any loans and the termination of the commitment.
The base loan rate is base plus 8%. The Eurodollar rate is the adjusted Libor plus 9%.
The DIP agreement also calls for a final order confirming the plan by Oct. 2 and consummation of the plan by Nov. 30.
Contec has requested a Sept. 28 hearing for consideration of the adequacy of its disclosure statement and for confirmation of the plan of reorganization.
As previously reported, Contec filed a prepackaged bankruptcy plan on Aug. 29 after reaching an agreement with the majority of its senior lender group.
The plan will discharge 100% of the company's subordinated notes obligations. The plan will also convert its senior credit agreement secured obligations into the majority of Contec's equity upon emergence and $27.5 million of new second-lien term notes.
A hearing on the DIP financing is scheduled for 1 p.m. ET on Aug. 31.
Contec, a Schenectady, N.Y.-based consumer premise equipment repair company providing services to the broadband industry, filed its prepackaged bankruptcy on Aug. 29 with the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 12-12437.
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