Mississippi Chemical obtains $96.7 million supplemental loan, lenders to tender for bank debt

By Peter Heap

New York, Dec. 22 - Mississippi Chemical Corp. said it obtained bankruptcy court approval for an additional post-bankruptcy petition credit facility that will be used to repay pre-bankruptcy filing bank debt.

In addition, the lenders under the new facility will tender all the company's other bank debt.

The new post-petition facility is $96.7 million in size.

Proceeds will be used to repay $90 million of bank debt owed to pre-bankruptcy filing lenders led by Harris Trust and Savings Bank and to pay $6.7 million of fees and expenses.

The repayment will reduce the outstanding pre-petition debt to $68 million and allow the company to retain its 50% equity interest in Point Lisas Nitrogen Ltd., formerly known as Farmland MissChem Ltd., its Trinidad ammonia facility.

The new term loan is being provided by funds managed by Delaware Street Capital and DDJ Capital Management LLC. It matures on Oct. 31, 2004.

These funds or their affiliates will also tender for Mississippi Chemical's remaining pre-filing bank debt and for amounts outstanding under the company's debtor-in-possession facility.

The tender will be at par plus accrued interest but exclude default interest.

The offer is subject to 51% of the banks by number tendering and 66 2/3% of the loan by principal amount being tendered.

The transaction is expected to close by Jan. 27.

Mississippi Chemical said it expects the pre-petition loans and the DIP facility will remain in place until its reorganization plan is confirmed or until alternative financing is arranged.

The developments also mean the U.S. Bankruptcy Court in Jackson, Miss., has entered an order terminating the sale of the company's equity interest in Point Lisas Nitrogen. Mississippi Chemical will pay Koch Nitrogen Co. a breakup fee in the amount of $3.8 million from proceeds of the new term loan.

"We are very pleased with the participation of Delaware Street Capital and DDJ Capital Management," said Charles O. Dunn, president and chief executive officer of Mississippi Chemical. "Their active involvement and intention to convert a substantial amount of their initial loan to equity in a reorganization, in combination with potential similar conversions, which we expect will be recommended by the Official Creditors' Committee, will significantly reduce the company's debt."

Mississippi Chemical will continue with its sale of its potash assets.

Mississippi Chemical is a Yazoo City, Miss., producer of nitrogen, phosphorus and potassium products used as crop nutrients and in industrial applications.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.