DCL gets court approval of DIP financing, bid procedures

By Sarah Lizee

Olympia, Wash., Feb. 23 – DCL Holdings (USA), Inc. received court approval of debtor-in-possession financing and bid procedures for its assets, according to orders filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Wells Fargo, NA, prepetition ABL agent and lender, is providing the $55 million DIP facility.

The facility’s amount will include a roll-up loan.

Interest will be at SOFR plus 400 basis points. The default interest rate will step up by 200 bps, if necessary.

An unused line fee of 50 bps will be due monthly.

The post-petition financing will mature the earlier of March 31 or certain outlined bankruptcy case dates.

Bid procedures

In addition to receiving approval of the bid procedures, the company was authorized to enter into a stalking horse agreement with Pigments Holdings, Inc.

The purchase price under the stalking horse agreement is a $45 million credit bid of prepetition term loan debt, in addition to enough cash to repay ABL debt in full, an additional cash consideration of up to $2.75 million and assumed liabilities.

Under the procedures, bids are due by 5 p.m. ET on March 10, an auction will be held on March 13, and a sale hearing will take place on March 16.

Based in Toronto, DCL is a manufacturer and supplier of pigments to customers in the coatings, plastics, printing inks and paper industries around the world. The company filed Chapter 11 bankruptcy on Dec. 21 under case number 22-11319.

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