Longview Power wins approval for $150 million DIP financing facility

By Jim Witters

Wilmington, Del., Nov. 21 - Longview Power LLC received approval for a $150 million debtor-in-possession financing facility that provides funding for the Chapter 11 case and exit financing during a Nov. 20 hearing in the U.S. Bankruptcy Court for the District of Delaware.

The DIP facility is being provided by eight of Longview's senior secured lenders, who collectively hold about 60% of the outstanding debt, said debtors attorney Ryan Preston Dahl.

Debtors attorney Ray C. Schrock called the consensual financing order "the greatest accomplishment in this case."

"The path to emergence is clear," he told the court.

The debtors intend to pursue a settlement concerning the equity interests of Dunkard Creek Water Treatment System, LLC and have reached an agreement in principle Schrock said.

That settlement would open the way for a Chapter 11 plan, he said.

Longview may be able to negotiate a global settlement, but if not, the debtors can emerge on a contested basis, Schrock told the court.

DIP details

Citicorp North America, Inc. is administrative agent for the DIP facility.

Union Bank, NA is the collateral agent.

The DIP facility includes a $30 million synthetic letter of credit through the Bank of Nova Scotia.

The agreement makes $5 million available to the debtors immediately.

The DIP facility terminates on the earliest of the scheduled termination date - which is 24 months from the loan closing - the consummation of any sale of a material portion of the debtors' assets, the substantial consummation of a Chapter 11 plan of reorganization and the acceleration of the loans and termination of the commitment.

Interest will be Libor plus 750 basis points or Base rate plus 650 bps.

The DIP term sheet also provides for the following:

• In exchange for the Longview credit agreement claims, and depending upon how much of the financing facility is used, each holder of the claim would receive a proportional share of up to 90% of the new common equity interests in the reorganized debtor; and

• The remaining new common interests would be issued to the DIP lenders as part of the DIP lender fee.

Longview and Mepco, an integrated power generation enterprise based in Maidsville, W.Va., filed for bankruptcy on Aug. 30. Their Chapter 11 case number is 13-12211.

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