Mesaba $24 million DIP facility approved

By Caroline Salls

Pittsburgh, Sept. 21 - Mesaba Aviation, Inc. received court approval to obtain $24 million in debtor-in-possession financing from Marathon Structured Finance Fund, LP, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Minnesota.

In July, the company was granted approval to pay an additional deposit of $100,000 to help cover the agent and lender costs in preparing to close the transaction and $120,000 of the $480,000 closing fee.

According to the DIP motion, when Mesaba filed for Chapter 11 bankruptcy it obtained a DIP commitment from parent MAIR, but, since the petition date, Mesaba has had success in delaying cash flow problems until now.

In March, the MAIR commitment expired and MAIR chose not to renew it.

Now, without access to DIP financing, Mesaba said it will soon be unable to operate its business.

Maturity of the DIP facility will be the earliest of two years or upon the effective date of a plan of reorganization.

The other terms of the DIP commitment were filed under seal.

Mesaba, an Eagan, Minn.-based Northwest Airlines affiliate, filed for bankruptcy on Oct. 13, 2005. Its Chapter 11 case number is 05-39258.

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