Valence Technology secures OK for $10 million DIP financing facility

By Jim Witters

Wilmington, Del., Sept. 13 - Valence Technology, Inc. received court approval for interim access to $5 million of its $10 million debtor-in-possession financing facility from GemCap Lending I, LLC, according to a Sept. 13 company press release.

The credit facility, approved by the U.S. Bankruptcy Court for the Western District of Texas, will be used to augment the company's liquidity and working capital.

"With this credit facility in place, the company expects that it will be able to continue to provide its goods and services to its customers without impediment," the press release states.

Valence expects to complete its U.S.-based restructuring before the end of 2012.

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.

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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