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Boscov's interim DIP financing, store closing agent selection procedures approved
By Caroline Salls
Pittsburgh, Aug. 5 - Boscov's Department Store LLC was granted interim access to its $250 million in debtor-in-possession financing from Bank of America, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.
The final DIP hearing is scheduled for Aug. 28.
The facility will include a $225 million senior revolving credit facility and an up to $25 million last-out revolver advance.
The DIP loan will mature on the earliest of 12 months from closing, upon a sale of substantially all of the company's assets or on the effective date of a plan of reorganization.
Interest on the revolver will be either Prime rate plus 100 basis points or Libor plus 300 bps, and interest on the advance will be either Prime rate plus 225 bps or Libor plus 425 bps.
Boscov's will pay a 2% underwriting fee, a $100,000 collateral agent fee and a $100,000 expense deposit. The company will also reimburse any DIP agent expenses that exceed the deposit amount.
The company also obtained court approval of the bidding procedures for the selection of an agent to conduct store closing sales at 10 underperforming stores.
Gordon Brothers LLC is the stalking horse bidder, with an offer of 103% of the cost value of the merchandise sold.
Boscov's said it expects the cost value of the merchandise to be at least $34 million.
Gordon Brothers will receive a $50,000 termination fee if it is not the high bidder at auction, as well as reimbursement of up to $50,000 of its sale-related expenses.
Competing bids are due at 4 p.m. ET on Aug. 8, and they must exceed the stalking horse bid merchandise value by at least $75,000.
The auction will be held Aug. 12, and the sale hearing is scheduled for Aug. 14.
Boscov's, a Reading, Pa.-based regional department store chain, filed for bankruptcy on Aug. 4. Its Chapter 11 case number is 08-11637.
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