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Mallinckrodt gets approval to access $150 million of DIP financing
By Sarah Lizee
Olympia, Wash., Aug. 30 – Mallinckrodt plc received approval to access $150 million of its proposed $250 million debtor-in-possession facility from the U.S. Bankruptcy Court for the District of Delaware, according to a press release.
The company said it also received court approval of its other first-day motions, enabling it to continue its operations.
As previously reported, the company has entered into a restructuring support agreement with holders of about 72% of its first-lien debt and about 71% of its second-lien debt, as well as the Opioid Master Disbursement Trust II, which was created out of the company’s previous bankruptcy proceedings.
Under the terms of the RSA, the company will reduce its first-lien debt by about $1.2 billion and eliminate all of its roughly $650 million of second-lien debt, while transitioning ownership of the company to its creditors.
The RSA provides for a new $250 million post-petition multi-draw, fully backstopped priming term loan facility from some existing creditors, which will be, at the election of each lender, repaid in cash at emergence or converted into takeback debt.
The DIP financing is set to bear interest at SOFR plus 800 basis points per annum, subject to a 1% SOFR floor. Any overdue amounts will bear interest at an additional 200 bps.
The financing is set to mature in one year, if not converted into takeback debt.
Mallinckrodt is a Dublin-based developer, manufacturer, marketer and distributor of specialty pharmaceutical products and therapies. The company filed its second Chapter 11 bankruptcy on Aug. 28 under case number 23-11258.
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