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Oakwood Homes to obtain $215 million DIP; to restructure with Berkshire Hathaway
By Sara Rosenberg
New York, Nov. 25 - Oakwood Homes Corp. has reached an agreement on a new $215 million debtor-in-possession financing facility and for continued access to its existing $200 million loan purchase facility.
Lead banks on the DIP are Berkshire Hathaway Inc., Greenwich Capital Financial Products, Inc. and Ranch Capital LLC.
On Nov. 15, the company and Berkshire Hathaway agreed to restructure the company's balance sheet. Under the proposed plan, Berkshire Hathaway would become the largest shareholder after Oakwood emerges from Chapter 11. Over the next couple of weeks a formal plan of reorganization will be prepared and filed. Credit Suisse First Boston acted as financial advisor in developing the plan of reorganization and FTI Consulting, Inc. acted as restructuring advisor in placement of the DIP.
The DIP, which is expected to receive court approval in mid-December, consists of a $140 million line to be used for general corporate liquidity needs and a $75 million loan servicing advance line. Furthermore, the DIP agreement allows for interim financing of up to $25 million until final court approval on the proposed financing is granted.
The loan will replace the company's existing $65 million revolver and $50 million loan servicing advance facility.
"We are also pleased to announce that we have reached an agreement in principle for continued access to our existing $200 million loan purchase facility, which will allow our finance company to originate loans as usual. We believe that the proposed $415 million of credit facilities should provide Oakwood with ample liquidity throughout the bankruptcy proceedings," said Myles E. Standish, president and chief executive officer, in a news release.
Oakwood Homes is a Greensboro, N.C. producer, seller financer and insurer of manufactured housing.
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