Global Power Equipment seeks DIP amendment to issue letter of credit for non-debtor affiliate

By Caroline Salls

Pittsburgh, April 2 - Global Power Equipment Group, Inc. requested court approval to amend its debtor-in-possession facility to allow the company to issue a letter of credit in connection with a credit facility covenant violation by non-debtor foreign affiliate Braden-Europe BV, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the motion, mostly because of Global Power's bankruptcy filing, Braden-Europe is not in compliance with a tangible net worth covenant under its credit facility with ABN Amro Bank, NV.

To resolve the issue and bring Braden-Europe back into compliance, it has asked Global Power to issue a $1.5 million irrevocable standby letter of credit in favor of ABN Amro.

A hearing is scheduled for April 19.

Global Power Equipment, a Tulsa, Okla., maker of gas turbine power plants and power-related equipment for industrial operations, filed for bankruptcy on Sept. 28, 2006. Its Chapter 11 case number is 06-11045.

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