Valence Technology seeks court approval for $10 million DIP facility

By Jim Witters

Wilmington, Del., Sept. 7 - Valence Technology, Inc. is seeking interim access to $5 million of debtor-in-possession financing as part of a $10 million DIP agreement with GemCap Lending I, LLC, according to documents filed Sept. 7 with the U.S. Bankruptcy Court for the Western District of Texas.

The court had approved a non-binding letter of intent between the parties on Aug. 24 to allow GemCap to complete due diligence.

The $10 million facility includes $2 million in letters of credit.

Interest is 14.5%.

The DIP is scheduled to terminate on the earliest of two years after the closing date, the plan confirmation date or the date the DIP lender exercises any of its rights to end the agreement.

Valence also is seeking an expedited hearing on the motion, preferably on Sept. 13.

"If the debtor does not obtain prompt access to the interim DIP financing facility, then the debtor will be unable to continue its operations in an orderly manner," the motion states.

Valence said the motion is unopposed by the U.S. Trustee, counsel for the pre-petition secured lender and counsel for the proposed DIP lender.

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.