Performance Powersports gets partial DIP approval; Feb. 13 hearing set

By Sarah Lizee

Olympia, Wash., Jan. 19 – Performance Powersports Group, Inc. got interim approval to access $3.5 million of a proposed $10 million debtor-in-possession facility, according to an interim order filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

Tankas Funding VI, LLC, an affiliate of the company’s equity sponsor, Kinderhook Industries, LLC, has committed to provide the new money financing.

The facility is being provided on a junior basis with respect to prepetition secured parties so that no secured lender will be primed by the DIP facility.

The facility is set to mature on March 31, but it may mature earlier if certain events happen prior to then, such as the closing of the sale.

Interest is 15% per annum. Default interest would be another 3%.

Performance Powersports also received interim approval to use cash collateral.

The final hearing is scheduled for Feb. 13.

Bid procedures hearing

According to a notice filed Thursday, the court will also hear a motion for approval of the bid procedures for the company’s assets on Feb. 13.

The company has lined up a stalking horse deal with Kinderhook that provides for a credit bid of the outstanding debt under the DIP facility, $500,000 in cash, the assumption of debt under a prepetition first-lien credit agreement, other assumed liabilities, and a wind-down amount. There is currently $52 million outstanding on the prepetition credit facility, plus accrued interest and other expenses.

The deal provides for a breakup fee of $2.2 million and a $500,000 expense reimbursement.

Under the proposed bid procedures, the bid deadline is 4 p.m. ET on March 7, an auction will be held on March 9, if needed, and a sale hearing will take place on March 17.

The Tempe, Ariz.-based producer of powersports equipment filed bankruptcy on Jan. 16 under Chapter 11 case number 23-10047.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.