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Valence Technology: court approves plans for $10 million DIP facility
By Lisa Kerner
Charlotte, N.C., Aug. 24 - Valence Technology, Inc. was granted court approval to enter into a non-binding letter of intent under which GemCap Lending I, LLC expressed interest in providing $10 million of debtor-in-possession financing, according to a Friday filing with the U.S. Bankruptcy Court for the Western District of Texas.
As previously reported, before it can provide the DIP financing, GemCap indicated it must complete due diligence on the collateral that would secure the proposed loan. If satisfied, it would prepare a loan agreement and related definitive documentation.
Valence was also granted court approval to pay a $25,000 due diligence deposit.
According to the proposal letter, the financing would be comprised of a $10 million senior revolving loan facility.
Interest would be 14.5%.
The facility would mature on the earlier of 24 months from closing and confirmation of Valence's plan of reorganization.
Valence withdrew a previous motion to enter into a debtor-in-possession financing proposal letter with Wells Fargo Bank, NA on Aug. 15.
Austin, Texas-based Valence Technology, a developer of lithium-ion batteries, filed for bankruptcy on July 12. The Chapter 11 case number is 12-11580.
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