Delta Petroleum looks to amend DIP loan in light of sale date changes

By Caroline Salls

Pittsburgh, March 26 - Delta Petroleum Corp. is seeking court approval to amend its debtor-in-possession credit agreement to avoid an event of default that could occur in connection with amended asset sale procedures, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

Under the DIP agreement, the company was originally required to deliver a letter of intent or similar agreement for the sale of substantially all of its assets or sponsorship of a plan of reorganization by March 31 and deliver an asset purchase agreement or a disclosure statement for a reorganization plan to the administrative agent by April 30.

As previously reported, Delta Petroleum received court approval to amend the bid procedures, setting the bid deadline for April 18, the auction for April 20 and the sale hearing for May 1.

As a result of the changes to the bid procedures, the company requested approval Monday to extend the DIP loan's letter-of-intent requirement to April 30 from March 31 and the asset purchase agreement requirement to May 30 from April 30.

The DIP facility commitment would also be increased by $1.4 million to $58.9 million under the proposed credit agreement amendment.

The company will pay a $287,500 extension fee.

Delta Petroleum, a Denver-based oil and gas exploration and development company, filed for bankruptcy on Dec. 15. Its Chapter 11 case number is 11-14006.

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