SP Newsprint seeks amendment to DIP in anticipation of sale closing

By Jim Witters

Wilmington, Del., Aug. 30 - SP Newsprint Holdings LLC is seeking a $7 million increase in its debtor-in-possession financing facility to cover additional costs connected to the sale of substantially all of the company's assets, according to an Aug. 30 filing with the U.S. Bankruptcy Court for the District of Delaware.

The original $20 million DIP facility was increased to $25 million in January 2012. Then in July, the court approved an increase to $60 million "to cover the obligations of the debtors for closing date administrative priority claims and cure costs, which the debtors' dip lenders had agreed to satisfy in connection with the sale," according to court documents.

"At the time the debtors entered into the July DIP agreement amendment, the parties anticipated that capacity under the DIP agreement would need to be $60 million, but such amount now needs to be increased to $67 million to cover other sale-related costs," the company said.

As previously reported, SP Newsprint is seeking to sell substantially all its assets to General Electric Capital Corp.

GE Capital, which holds $280 million of secured pre-bankruptcy debt, submitted - through affiliate SPN AcquisitionCo, LLC - a $145 million credit bid.

A hearing on the DIP amendment and the proposed sale is scheduled for 1 p.m. ET on Sept. 4.

SP Newsprint, a Greenwich, Conn.-based newsprint producer, filed for bankruptcy on Nov. 15, 2011. Its Chapter 11 case number is 11-13649.

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