Magnetation granted final approval of $135 million in DIP financing

By Kali Hays

New York, June 10 – Magnetation LLC obtained final access to a $135 million debtor-in-possession facility on Wednesday under an order from the U.S. Bankruptcy Court for the District of Minnesota.

As previously reported, the company had been operating with interim access to $55 million of the loan since May 7.

A group of senior secured noteholders are providing the loan and Wilmington Trust, NA is the administrative and collateral agent.

The financing will mature on the earlier of the effective date of a Chapter 11 plan and the closing of a sale of all or substantially all of the company’s assets.

Interest will be 12%.

Magnetation said the DIP facility will provide it with $63.7 million of incremental liquidity. The balance of the financing will come from a roll-up of pre-bankruptcy debt.

The DIP financing and cash generated from Magnetation’s ongoing operations will be used to support the business during the reorganization process.

Magnetation, a joint venture between Magnetation, Inc. and AK Steel Corp., recovers high-quality iron ore concentrate from previously abandoned iron ore waste stockpiles and tailings basins. It is based in Grand Rapids, Minn., and filed for bankruptcy on May 5 under the Chapter 11 case number is 15-50307.

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