SiO2 Medical Products’ Chapter 11 plan effective as of Aug. 3

By Sarah Lizee

Olympia, Wash., Aug. 4 – SiO2 Medical Products, Inc.’s Chapter 11 plan went into effect on Thursday, according to a notice filed with the U.S. Bankruptcy Court for the District of Delaware.

The plan was accepted by all voting creditors and confirmed on July 19, as previously reported.

Specifically, the one holder of $224.74 million of first-lien term loan claims, the one holder of $36.51 million of second-lien term loan claims, 32 holders of $17.13 million of general unsecured claims and four holders of $109.54 million of Athos subordinated claims accepted the plan.

Oaktree Capital Management, LP, which holds all of the company’s first-lien debt and debtor-in-possession debt, is acting as plan sponsor.

The plan is also supported by equity holder Athos KG and the official committee of unsecured creditors.

During the Chapter 11 process, Oaktree agreed to provide a $120 million superpriority DIP facility, $60 million of which was new money and $60 million was a rollup of prepetition term loans.

Oaktree also committed to serve as the initial plan sponsor and equitize its allowed DIP claims and allowed first-lien term loan claims into 100% ownership of reorganized SiO2 through the plan, subject to the company meeting certain milestones and Oaktree’s ability to move away from the plan and purchase the assets of the debtors if a toggle trigger had occurred.

Under the plan, other secured claims and other priority claims are unimpaired.

Holders of first-lien term loan claims will receive their pro rata share of new common stock or exit financing. This is expected to lead to a recovery of 71.2% to 100%.

According to a plan supplement filed Thursday, the company has lined up a $60 million exit facility with Oaktree as administrative agent. The facility bears interest at 12% per year and matures Aug. 3, 2028.

Through a settlement, holders of second-lien term loan claims agreed that their claims will recover as Athos subordinated claims.

Holders of general unsecured claims will receive their pro rata share of a $1.25 million cash pool and distributions on account of the liquidation trust interests.

Holders of Athos subordinated claims will receive their pro rata share of distributions on account of liquidation trust interests, after senior classes have been paid in full or otherwise satisfied.

Holders of intercompany claims, intercompany interests, section 510(b) claims and interests in SiO2 will receive no recovery.

The Auburn, Ala.-based company creates and manufactures engineered primary packaging container components for the pharmaceutical and biotechnology industry. The company filed bankruptcy on March 29 under Chapter 11 case number 23-10366.

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