RG Steel LLC, the fourth-biggest U.S. maker of flat-rolled steel, won court approval to borrow as much as $50 million to help fund operations while it works toward a sale of its assets.
U.S. Bankruptcy Judge Kevin Carey in Wilmington, Delaware, today approved the interim loan from existing lenders led by agent Wells Fargo Capital Finance LLC. Carey called milestones within the loan “aggressive,” which the company must meet as part of the financing requirements.
RG Steel, based in Sparrows Point, Maryland, listed assets and debts of more than $1 billion each in Chapter 11 documents filed yesterday when it sought court protection.
The steelmaker needed the loan to keep the mills operational while it pursues a sale of virtually all its assets. Deadlines include a sale by July 27.
“The lenders have agreed to provide a lifeline however short” so RG Steel “can pursue a sale,” Shaunna D. Jones, a lawyer representing the company, told Carey. “Conversations have been happening with potential purchasers.”
The bankruptcy loan gives the company as much as $30 million in available funds through June 15 and then up to an additional $20 million from June 16 to July 27, court documents show.
The lead case is In re WP Steel Venture LLC, 12-11661, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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