VeraSun Energy Corp. Receives Commitments For Up to $215 Million in Debtor-In-Possession Financing
Date Posted: November 3, 2008
Company Also Wins Interim Court Authority to:
Pay outstanding employee checks.
Pay suppliers in the ordinary course for post-petition goods and services.
Pay suppliers delivering doods on or after October 11, 2008.
Sioux Falls, SD—VeraSun Energy Corporation, one of the nation's largest ethanol producers, announced Nov. 3 that it had received commitments for up to $215 million in debtor in possession (DIP) financing from certain holders of VeraSun's 9 7/8% senior secured notes due 2012 and groups of lenders led by AgStar Financial Services.
At today's "first day" hearing, the U.S. Bankruptcy Court entered an interim order allowing VeraSun and its affiliates to borrow up to $40 million from these DIP facilities and authorized the use of cash collateral to enable VeraSun to operate its business.
VeraSun is also in negotiations with its other lenders and expects to receive, when combined with commitments received from the 2012 noteholders and AgStar lenders, aggregate DIP financing commitments totaling $250 million.
Judge Brendan L. Shannon of the U.S. Bankruptcy Court, District of Delaware in Wilmington also granted VeraSun's emergency request to pay outstanding employee checks, to pay suppliers for postpetition goods and services and up to $20 million for goods delivered on or after October 11, 2008, and for other emergency relief.
The Bankruptcy Court is expected to conduct a hearing tomorrow to rule on the remaining relief requested by VeraSun in its "first day" motions.
"The financing package approved today allows VeraSun to maintain operations and continue supplying its customers. The relief granted by the Court today will allow us to focus on our operations and, at the same time, provide VeraSun with the liquidity and ability to continue operations, which means producing ethanol and distillers grains, paying suppliers, and satisfying customer needs for product," said VeraSun's Chief Executive Officer Don Endres.
For more information, call Mike Lockrem at 605-978-7055.