Molycorp wins interim access to $22 million of Oaktree DIP financing

By Caroline Salls

Pittsburgh, July 2 – Molycorp, Inc. was granted interim court approval to access $22 million in interim debtor-in-possession financing provided by an affiliate of Oaktree Capital Management, according to a Thursday news release.

The final hearing is scheduled for July 20.

As previously reported, Molycorp requested court approval to obtain up to $291.76 million in DIP financing from Oaktree.

The Oaktree facility consists of a $126.37 million fully committed and funded multi-draw term loan, which includes a 7% original issue discount.

The facility also includes an additional $104.4 million available upon entry of the final order, including the 7% original issue discount, and a roll up of all outstanding obligations arising under or in connection with the Oaktree secured financings.

Molycorp said the obligations include outstanding principal and accrued interest and early premium payments in the amount of $50.11 million.

The facility carries a 7% interest rate to be paid in cash and a 7% interest rate to be paid in kind.

The Oaktree facility will mature on the earliest of an asset sale effective date, the date all loans are due and payable and a Dec. 31 outside date.

The company said the new funds will support operations going forward for an interim period while it continues to negotiate with Oaktree and a group representing Molycorp’s secured 10% noteholders, both of which represent secured creditors that have presented competing DIP financing proposals.

Between now and the July 20 final hearing, the company said parties may provide improved and competing proposals for the financing, and both groups of lenders expressed their desire to provide financing on a final basis.

Molycorp said it now has the funds to continue its operations and to move forward on releasing funds to pay suppliers. In addition, the company said employees will continue to work their usual schedules, and purchasing of goods and services can proceed.

Molycorp is a Greenwood Village, Colo., producer of materials from rare earth minerals that filed for bankruptcy on June 25. The Chapter 11 case number is 15-11357.

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