Grupo Hima seeks more DIP financing; committee objects to terms

By Sarah Lizee

Olympia, Wash., Oct. 25 – Grupo Hima San Pablo Inc. is seeking approval to increase its $7 million debtor-in-possession facility to $9 million, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the District of Puerto Rico, according to an order filed Friday.

The company said in the motion that its sale process has been supported by the existing post-petition DIP facility, which has allowed the debtors to continue to operate their business operations and provide critical health care services while simultaneously pursuing a sale of their assets.

However, the debtors need additional financing to close the asset sales and fund the costs of the Chapter 11 cases, Grupo Hima said.

The official committee of unsecured creditors filed an objection to the motion on Wednesday.

The committee said that through the proposed amendment to the DIP loan, the secured lenders would place themselves in a prime position to drain the remainder of the estate’s diminishing resources.

The group noted that, for a $2 million new-money loan, the new money and rolled-up obligations combined would move from their current balance of $38.5 million to at least $49.5 million, plus unpaid lender professional fees, leaving no room for new loans, at least out of asset sales.

The proposed 4:1 ratio of rolled-up loans to new money loans plus another commitment fee of 10% ($200,000) would create an $8.8 million DIP senior lien and super-priority position in return for a $2 million loan and the commitment fee, the committee said.

Plus, the loan would give the debtors only another two days of “life” through Oct. 27, the group added.

“Unless the secured lenders can agree to modified terms wherein this Chapter 11 process will be run in a manner that benefits more than just one party in interest, the committee cannot support the amended DIP facility,” the committee said.

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

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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