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The debt will reportedly be secured by the bulk of the company's assets and most of its domestic subsidiaries.
Stephen Taub, CFO.com | US
November 28, 2007
Dana Corp. has gotten commitments for $2 billion in exit financing, which will enable it to emerge from bankruptcy by the end of January, according to the company.
The financing will consist of a $650 million asset-based, revolving credit facility and a $1.35 billion term loan facility. The loans will reportedly be secured by practically all of the company's assets and most of its domestic subsidiaries. The financing will expire on Feb. 29, according to the Associated Press.
Citigroup Global Markets, Lehman Brothers, and Barclays Capital will underwrite the exit facilities, the troubled auto-parts maker stated. Dana said it would use the borrowings to repay its debtor-in- possession credit facility, make other payments required upon exit from bankruptcy, and provide liquidity to fund working capital and other general corporate purposes.
Last month, the bankruptcy court hearing the company's case approved its proposed reorganization plan and authorized Dana to start soliciting votes from its creditors, according to the company. Dan, which filed for bankruptcy in March 2006, will start mailing notices of the proposed confirmation hearing to qualified claim holders in about a week.
The confirmation hearing for the reorganization plan is set for December 10. Under the plan, a group of investors led by Centerbridge Capital Partners would make a $790 million equity investment. Centerbridge’s funds would consist of $250 million for preferred stock in the reorganized company and up to $540 million of preferred stock not bought by qualified creditors or an investor group, according to Reuters. Dana’s reorganization has included selling several businesses, renegotiating labor contracts with its hourly workers, and reaching agreements with its customers, the wire service reported.
Unsecured creditors would get 72 percent to 86 percent of the $3 billion they're owed in new stock, according to a later Reuters story.