Meridian seeks court OK for $75 million new DIP facility from Deutsche Bank

By Caroline Salls

Pittsburgh, June 15 - Meridian Automotive Systems Inc. asked for approval of up to $75 million in debtor-in-possession financing from Deutsche Bank Trust Co. Americas, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

Meridian said after it was granted an extension to $30 million in interim DIP financing from original lender JPMorgan Chase Bank NA, it negotiated a new DIP facility with JPMorgan that was "unacceptable."

As a result, Meridian sought financing proposals from other lenders, including Deutsche Bank.

The new facility will be comprised of a revolving credit facility and letter-of-credit subfacility.

Maturity will be 18 months from the closing date.

The interest will be Libor plus 300 basis points. The letter-of-credit fee will be 0.25%.

The unused portion fee will be 50 basis points.

Meridian said the new financing will be used to "even out" periodic timing effects brought on by seasonal working capital fluctuations, to bridge the $15 million to $20 million working capital shortfall resulting from the expanded General Motors payment cycle and to make adequate protection payments to some secured creditors.

A hearing to approve the new DIP financing is scheduled for June 29.

At the moment, Meridian has interim approval for a $30 million DIP facility with JPMorgan.

However, at a final hearing on May 26 it did not go ahead with a request for approval of the full $375 million facility with JPMorgan, instead asking for - and receiving - a continuation of the interim facility until June 30.

Following that court decision, Meridian has decided that it will no longer seek a DIP facility big enough to repay its $310 million of first-lien bank debt but it instead will look for a credit line that will supplement its current liquidity.

Meridian is a Dearborn, Mich., supplier of front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Its Chapter 11 case number is 05-11168.

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