Vertellus gets approval of first-day motions, access to DIP financing

By Angela McDaniels

Tacoma, Wash., June 1 – Vertellus Specialties Inc. said that the U.S. Bankruptcy Court for the District of Delaware has approved all of the first-day motions related to its voluntary Chapter 11 process.

According to a company news release, these approvals will allow Vertellus to operate its business as usual with full authority to access $110 million of new debtor-in-possession financing from its existing term loan lenders, which, combined with normal operating cash flow, will allow the company to maintain its normal course operations and meet its ongoing financial commitments throughout the sale process.

It also allows the company to pay employees as usual; reimburse approved business expenses; continue existing medical benefits, vacation time, sick leave, holidays and 401(k) match programs without interruption; and maintain customer programs and sales incentives.

As previously reported, Vertellus, parent Vertellus Specialties Holding Corp. and U.S.-based subsidiaries filed Chapter 11 bankruptcy Tuesday to implement an agreement under which the company’s existing term loan lenders would purchase substantially all of Vertellus’ U.S. and international assets for $453.8 million.

For the DIP financing, the interest rate will be Libor plus 900 basis points. The facility will mature in 180 days, subject to an 18-month extension.

Vertellus is an Indianapolis-based provider of specialty chemicals for the agriculture, nutrition, pharmaceutical and medical, personal care, plastics, coatings and industrial markets. The Chapter 11 case number is 16-11290.

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