Dana gets court OK for $2 billion senior secured exit facility

By Reshmi Basu

New York, Dec. 5 - Dana Corp. received court approval Wednesday to borrow up to $2 billion in exit financing, which will allow the company to exit Chapter 11 bankruptcy by the end of January or earlier.

Judge Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York approved the senior secured facility, which will be underwritten by Citigroup Global Markets Inc., Lehman Brothers Inc. and Barclays Capital.

In noting the current turmoil in the credit markets, Dana attorney Corinne Ball of Jones Day LLP described the deal as a "major linchpin" in the company's reorganization plan.

The package will consist of a $650 million five-year asset-based revolving credit facility, with a $400 million sublimit for letters of credit, and a $1.35 billion seven-year term loan facility.

As reported earlier, proceeds will be used to repay Dana's debtor-in-possession credit facility, to make other payments required upon the company's exit from bankruptcy and to provide liquidity to fund working capital and other general corporate purposes.

In a separate matter, Ball told the court that according to the latest preliminary vote tally, there has been a favorable response to the company's reorganization plan.

In particular, 98% of the general unsecured class and 100% of holders of the union claims supported the plan.

The vote certification is slated to be released on Thursday.

Furthermore, ahead of Monday's confirmation hearing, Ball said that the company is continuing to negotiate with various parties to resolve the remaining five objections to the plan.

Dana, a Toledo, Ohio-based supplier of components, modules and systems to vehicle manufacturers and related aftermarkets, filed for bankruptcy on March 3, 2006. Its Chapter 11 case number is 06-10354.

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