Flying J gets final court approval of $10 million DIP loan

By Jennifer Lanning Drey

Portland, Ore., March 9 - Flying J Inc. and its Longhorn Pipeline Inc. debtor were granted final court approval to obtain $10 million in debtor-in-possession financing from Merrill Lynch Commodities, Inc., according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the DIP facility will mature on April 15.

Interest will be Libor plus 650 basis points, with a 3% Libor floor.

Longhorn owns and operates a pipeline that is filled with more than 900,000 gallons of refined diesel and gasoline products that include a "winter mix" product. Flying J said the winter mix cannot be sold outside of the winter season, which ends in April.

Without access to the additional financing, the company said it was unable to ensure the winter mix product can be pushed through the pipeline for sale before the end of the winter season.

Although profit margins are not guaranteed, Flying J said the sale of the product currently in the pipeline could result in a $9 million profit for the company.

Flying J, an Ogden, Utah, fully integrated oil company, filed for bankruptcy on Dec. 22. Its Chapter 11 case number is 08-13384.

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