EaglePicher granted court approval of $295 million DIP/exit facility; agrees to plan terms

By Caroline Salls

Pittsburgh, Nov. 29 - EaglePicher Inc. obtained court approval of a $295 million senior secured debtor-in-possession facility from Goldman Sachs Credit Partners LP and a $50 million junior secured DIP from Angelo, Gordon & Co., LP and Tennenbaum Capital Partners, LLC and agreed to terms of a plan on reorganization Tuesday.

According to a news release, the company agreed to a term sheet with its official committee of unsecured creditors for a consensual plan of reorganization that provides for the transfer of substantially all of the operating assets of the company to newly formed companies.

Under the plan, all of the common stock of the new holding company will be distributed to holders of the company's 9¾% senior notes and some other unsecured non-trade creditors, with unsecured trade creditors receiving their share of the plan consideration, if any, in the form of cash payments over time or a single discounted cash payment.

According to a filing with the U.S. Bankruptcy Court for the Southern District of Ohio, the DIP proceeds will be used to repay in full EaglePicher's existing bank debt and its current DIP financing and is convertible into financing for the reorganized company upon court approval of a plan of reorganization and satisfaction of other conditions.

The Goldman Sachs facility includes a $220 million first-lien credit facility and a $75 million second-lien term loan.

The $220 million facility includes a $150 million tranche B term loan, a $40 million revolving credit facility and a $30 million synthetic letter-of-credit facility.

Maturity on the tranche B facility, revolver and synthetic letter-of-credit facility is one year or on the earlier consummation of a plan of reorganization.

Interest on the tranche B facility and the revolver is be Libor plus 400 basis points. The letter-of-credit fee is 25 bps.

Maturity on the second-lien term facility is the earlier of one year or upon consummation of the plan of reorganization, with an option to extend the facility up to 5½ years.

Interest is Libor plus 750 bps.

Maturity on the $50 million junior secured DIP from Angelo Gordon and Tennenbaum is the earliest of six months following the maturity of the junior-most tranche of the senior DIP; the effective date of a plan of reorganization; upon occurrence of an event of default; the date of repayment in full of the third-lien DIP or Dec. 31.

Interest is Libor plus 1,250 bps on a payment-in-kind basis.

"In combination with the financing commitments we announced previously, we believe that reaching agreement with the creditors committee on the key elements of a plan of reorganization represents a significant milestone for EaglePicher to emerge from bankruptcy," interim chief executive officer and chief restructuring officer Stuart B. Gleichenhaus said in the release.

"The financing provides us the funding to repay all secured creditors in full, distribute fair value to our unsecured creditors and properly finance each of our businesses going forward."

EaglePicher, a Phoenix-based diversified manufacturer, filed for bankruptcy on April 11, 2005. Its Chapter 11 case number is 05-12601.

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