Anchor Glass: court OK sought for USD 125 million DIP loan

Anchor Glass Container Corp. has asked the bankruptcy court to approve a USD 125 million debtor-in-possession (DIP) loan to settle the company“s existing DIP loans.
In court papers filed 24 August 2…

Anchor Glass Container Corp. has asked the bankruptcy court to approve a USD 125 million debtor-in-possession (DIP) loan to settle the company“s existing DIP loans. In court papers filed 24 August 2005 in the US Bankruptcy Court in Tampa, Florida, a group of Anchor Glass noteholders said it would extend a USD 125 million loan to the company so it can pay off USD 79 million owed to lenders Wachovia Capital Finance and Madeline LLC. Earlier in August 2005, Wachovia agreed to roll over its existing revolving credit line into a DIP facility so Anchor Glass could continue in business during its Chapter 11 case. Anchor Glass also received USD 15 million in interim financing from the noteholders providing the new DIP funding. The firm said it will use the remaining proceeds to fund its operations during the bankruptcy case. A court hearing on the DIP financing is set for 8 September 2005. Interest on the USD 125 million term loan is at LIBOR plus 7%. The term is one year. The loan also covers USD 2 million for professional fees. The lenders, led by Wells Fargo Bank N.A., comprise an ad hoc committee of the majority of holders of USD 350 million in secured notes due 2013. In return for providing the DIP financing, the noteholders will receive first-priority liens on all of Anchor Glass“ assets. Anchor Glass filed on 8 August 2005 to reorganize under Chapter 11 in US Bankruptcy Court in Tampa, listing assets of USD 661.5 million and debts of USD 666.5 million in the filing. It is the third Chapter 11 filing by Anchor in nine years. The company also filed in 1996 and 2002.