Metro Fuel Oil parties agree to $2.5 million additional interim DIP

By Jim Witters

Wilmington, Del., Oct. 16 - Metro Fuel Oil Corp. and its lenders have agreed to increase the company's interim debtor-in-possession financing facility by $2.5 million and extend the use of cash collateral through Oct. 31, according to documents filed Oct. 16 with the U.S. Bankruptcy Court for the Eastern District of New York.

The first interim DIP order, granted on Sept. 28, provided Metro Fuel with access to $3 million.

A final DIP hearing is scheduled for 9 a.m. ET on Oct. 31.

As previously reported, the DIP lenders are Third Avenue Special Situations (Master) Fund, LP and Zell Credit Opportunities Master Fund, LP.

The term loan will mature the earlier of 90 days from the filing date and the closing of a sale of substantially all of the company's assets. There is an option for a single 30-day extension of the maturity date.

Interest will be 6%, which will be payable in kind and added to the principal amount of the DIP facility during the term of the loan.

Metro has paid a total of $200,000 of commitment fees.

Metro Fuel, a Brooklyn, N.Y.-based energy company that supplies bioheat, biodiesel, heating oil, central air conditioning units, ultra low sulfur diesel fuel, natural gas and gasoline throughout the New York City metropolitan area and Long Island, filed for bankruptcy on Sept. 27. The Chapter 11 case number is 12-46913.

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