A federal bankruptcy court has approved Quiksilver’s $175 million debtor-in-possession (DIP) financing package from Oaktree Capital Management and Bank of America, according to Quiksilver.
Quiksilver will use the funds to operate during the bankruptcy process.
The Committee of Unsecured Creditors had objected to the plan for several reasons, including that the terms were too advantageous for Oaktree.
The Creditors Committee had lobbied for a new DIP offer from a holder of unsecured notes, Brigade Capital Management.
We have not yet seen the details about how the terms of the Oaktree DIP proposal may have been altered by the judge as a result of the court hearing last week, but will report any changes as soon as possible. To read more information about the proposed terms of the DIP and what the Creditors’ Committee objected to, see our previous story.
In addition, the court ruled last week that Quiksilver can pay its critical manufacturing vendors another $10 million on top of the $30 million it has already spent in this area since the bankruptcy filing.
The court had been scheduled to also decide on the plan sponsorship agreement (PSA) proposed by Oaktree. Oaktree is proposing a reorganization plan that includes converting its debt into majority ownership of Quiksilver.
According to a Quiksilver spokesman, the court pushed the decision on the PSA until a later date.
There are still several steps and approvals that are needed until the big picture Quiksilver and Oaktree plan is final, however approval of Oaktree’s debtor-in-possesion (DIP) financing package is an important step in the process.
Quiksilver CEO Pierre Agnes commented on the DIP approval in a statement.
“We are pleased to have Court approval of the final DIP financing allowing our reorganization to proceed on track as well as an additional $10 million to pay pre-petition claims for Critical Vendors,” he said. “We will continue to work in close cooperation with the Creditors’ Committee to execute our financial and operational restructuring, which is designed to restore the company to long-term financial health. We look forward to emerging from the Chapter 11 process, a stronger company better positioned to prosper into the future.”
