Coach America receives interim approval for $14.83 million financing

By Jim Witters

Wilmington, Del., Jan. 5 - Coach America Holdings Inc. received interim approval Thursday for $14.83 million in debtor-in-possession financing through JPMorgan Chase Bank, NA.

The decision came during a first-day hearing in the U.S. Bankruptcy Court for the District of Delaware.

A final DIP hearing is scheduled for Jan. 27.

DIP loan terms

As previously reported, Coach America obtained a commitment for $30 million of DIP financing from a steering committee of its existing senior lenders.

JPMorgan Chase is the administrative agent and collateral agent. J.P. Morgan Securities LLC is the lead arranger.

The company said the DIP financing will support its fleet investment and help ensure the continuation of normal operations.

Interest will be either adjusted Prime rate plus 500 basis points or adjusted Libor plus 600 bps.

The DIP loan will mature on the earliest of nine months from the effective date, 30 days after entry of the interim order if a final order has not been entered and the earlier of closing of a sale of substantially all company assets and the effective date of a plan of reorganization.

The DIP agreement requires the company to file a motion for approval of the bid procedures for a sale of its assets by Jan. 13, obtain a bid procedures order by Feb. 2 and either begin soliciting votes on a plan of reorganization or obtain court approval for an asset sale by May 1.

Coach America is a Dallas-based tour and charter bus operator and motorcoach services provider. Its Chapter 11 case number is 12-10010.

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