Falcon requests approval of DIP amendment that increases availability by $8 million

By Caroline Salls

Pittsburgh, June 22 - Falcon Products, Inc. requested approval of an amendment to its debtor-in-possession facility that would provide the company with up to $8 million in additional DIP availability in exchange for a 1.5% interest increase, according to a Tuesday filing with the U.S. Bankruptcy Court for the Eastern District of Missouri.

In addition to the interest increase, Falcon will be required to pay a $100,000 amendment fee.

According to the filing, the company is not requesting an increase in the overall amount of the facility, but only in the availability.

Falcon said the amendment is "critical to the continued operating of [its] business."

"Without the availability amendment, [Falcon has] currently projected that there will be less than $500,000 of availability under the DIP facility as of July 2, 2005, which will potentially cripple operations," the filing said.

A hearing was scheduled for Wednesday.

Falcon obtained court approval for the $45 million DIP on Feb. 24.

The DIP carries interest at Prime rate plus 350 basis points with a minimum of 8.75%.

There is also a 100 basis point fee on the unused portion of the facility.

The maturity is one year unless Falcon exits Chapter 11 sooner.

DDJ Capital Management, LLC is administrative agent.

The St. Louis manufacturer of commercial furniture filed for Chapter 11 on Jan. 31. Its case number is 05-41108.

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