Nine Point Energy seeks approval of DIP loan, stalking horse deal

By Sarah Lizee

Olympia, Wash., March 16 – Nine Point Energy Holdings, Inc. filed motions seeking court approval of $18 million of new money debtor-in-possession financing and entry into a stalking horse agreement with its pre-bankruptcy secured lenders late Monday with the U.S. Bankruptcy Court for the District of Delaware.

DIP financing

The company is seeking interim access to $13 million of the new money DIP loans.

The DIP financing also includes a roll-up of $54 million of pre-petition obligations, with $16.11 million available on an interim basis.

Interest will be Libor plus 800 basis points, subject to a 1% Libor floor. There is a 2% commitment fee.

The facility will mature in 90 days at the latest.

Pre-petition agent AB Private Credit Investors LLC is the DIP agent.

Proceeds will be used for working capital and general corporate purposes, and for bankruptcy-related costs and expenses.

Stalking horse agreement

The company is also seeking court approval to enter into a stalking horse agreement with an entity to be designated by AB Private Credit Investors.

The purchase price for substantially all of the debtors’ assets includes a credit bid, on a dollar-for-dollar basis, of at least $250 million, comprised of the full amount of the DIP obligations outstanding as of the closing date, and up to 100% of the pre-petition obligations.

Bid protections will be capped at $750,000, according to the term sheet.

Under the company’s proposed bid procedures, bids would be due by 5 p.m. ET on April 29, an auction, if needed, would be held on May 4, and a sale hearing would be held on or before May 14.

The Denver-based exploration and production company filed bankruptcy on March 15 under Chapter 11 case number 21-10570.

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