Grupo Hima San Pablo receives approval of $7 million DIP facility

By Sarah Lizee

Olympia, Wash., Oct. 3 – Grupo Hima San Pablo Inc. received approval of its amended $7 million debtor-in-possession financing from the U.S. Bankruptcy Court for the District of Puerto Rico, according to an order filed Friday.

The court denied the company’s initial motion for DIP financing, as previously reported.

The financing was then amended to, among other things, increase the facility to $7 million from $6 million and decrease the rollup to 4:1 from 5:1.

Alter Domus (US) LLC is the administrative agent and collateral agent and prepetition secured lender Island Healthcare LLC is the lender.

The Municipal Revenue Collection Center (CRIM), the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF) and the U.S. trustee overseeing the case had all filed objections to the original financing motion.

The court’s decision focused mainly on whether or not the priming of CRIM’s first-rank statutory lien under the proposed financing arrangement is appropriate, since it appears that CRIM will be the only party directly affected by the priming of its statutory lien.

The court found that the debtors had not satisfied their burden of establishing that CRIM’s first-ranked statutory lien is adequately protected, and that the debtor’s adequate protection analysis lacks crucial factual financial information on both the asset and liability side of the balance sheet, the court said.

The amended financing provides that the DIP liens are junior to any statutory liens in favor of CRIM solely in respect of the CRIM obligations, which will allow for a sufficient equity cushion and payment of the CRIM obligations in connection with the sale process, the company said.

Also, the amended financing segregates proceeds of the Molina litigation and the debtors’ accounts receivable outstanding for more than 120 days as part of a consensual arrangement with the debtors and first-lien secured parties.

The Caguas, Puerto Rico-based health care services company filed bankruptcy on Aug. 15 under Chapter 11 case number 23-02510.

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