Enesco requests approval of bidding procedures, financing for asset sale

By Caroline Salls

Pittsburgh, Jan. 18 - Enesco Group, Inc. requested court approval of the bidding procedures and related financing for the proposed sale of substantially all of the assets of Enesco and Gregg Gift Manufacturing, Inc., according to a Thursday filing with the U.S. Bankruptcy Court for the Northern District of Illinois.

EGI Acquisition LLC, a subsidiary of Tinicum Capital Partners II, LP, is the stalking horse bidder.

In connection with the sale, Enesco is seeking court approval to obtain $65 million in post-bankruptcy financing from Wells Fargo Foothill, Inc., which will be used to pay amounts owed under Enesco's pre-bankruptcy credit agreement and for general corporate purposes.

Tinicum will purchase a 100% participation interest in the post-bankruptcy financing, and the proposed purchase price for the assets will be used to pay off the post-bankruptcy financing.

The purchase price will also include forgiveness of any and all pre-bankruptcy liabilities owed to affiliates of the buyer, including a $100,000 deposit funded by an EGI affiliate for the benefit of Tinicum; and $600,000 for administration expenses incurred by Enesco in its bankruptcy case.

The post-bankruptcy facility will be in the form of a $65 million revolving credit facility, including a $1.5 million letter-of-credit sublimit.

Maturity will be the earliest of an event of default; conversion of the bankruptcy case to Chapter 7; the effective date of any plan of reorganization or liquidation; 90 days after the interim financing order; the closing of a sale of substantially all of the collateral; Feb. 21 if the final DIP order has not been entered; or the date of a final hearing if the financing is not approved.

Interest will be Base rate plus 250 basis points or Libor plus 550 bps, at Enesco's option.

If EGI is not the high bidder for the assets, Enesco will pay it a break-up fee of 3% of the total purchase price and expenses reimbursement of 0.5% of the total purchase price.

The asset sale auction is scheduled for Feb. 7, and the sale hearing will be held Feb. 8.

A hearing on the bid procedures and post-bankruptcy financing is scheduled for Jan. 22.

Enesco, an Itasca, Ill., producer of fine gifts, collectibles and home decor accessories, filed for bankruptcy on Jan. 12. Its Chapter 11 case number is 07-00565.

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