Court approves Solutia DIP amendment

By Jeff Pines

Washington, July 20 - Solutia Inc.'s request for a second amendment to its debtor-in-possession financing facility was approved, according to a court order filed Tuesday.

The order increases the amount from asset sales that the St. Louis-based chemical company will not have to repay to its lenders to $7.5 million from $2.5 million. It will also permit the company the keep the first $5 million from specified property sales and limit the prepayment obligation for proceeds of these sales to 50% of the next $10 million of sale proceeds, the company said in its original filing.

The amendment also enables Solutia to enter into certain sale-leaseback transactions.

To get the amendment, Solutia will pay a 12.5 basis point fee, or $656,250, to the DIP lenders and a $250,000 documentation fee to Citicorp, which is the DIP agent.

Solutia filed for bankruptcy on Dec. 17, 2003. Its Chapter 11 case number is 03-17949.

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