Following the autumn 2005 repayment of its USD 125 million debtor-in-possession loan, Anchor Glass Container Corp. now says it needs another DIP loan to keep operations running.
The glass manufacturi…
Following the autumn 2005 repayment of its USD 125 million debtor-in-possession loan, Anchor Glass Container Corp. now says it needs another DIP loan to keep operations running. The glass manufacturing company, in Chapter 11 bankruptcy proceedings since August 2005, filed an emergency motion on 21 March 2006 seeking bankruptcy court approval of a USD 10 million DIP loan. The loan will be financed by some of the noteholders who bought USD 15 million of post-petition senior secured term notes from Anchor Glass in 2005. The company said in court papers that the proposed loan “is critical to its ability to operate as a going concern and to preserve and protect the value of its assets and operations for its creditors, shareholders, customers and its estate”. The company gained court approval in September 2005to issue notes after its bankruptcy filing to Wells Fargo Bank. Anchor Glass said it used the proceeds of those notes to repay loans to Wachovia Corp. and Madeleine LLC. Wachovia acted as the agent for Anchor Glass“ original DIP loan. Now, the company said it wants to enter into “hedge agreements to protect its business from the volatility of natural gas prices and to build additional cash reserves”. Since Anchor Glass needs funding to meet those objectives, it turned to its noteholders for financing. The company said it talked to the ad hoc committee of secured noteholders, the committee of unsecured creditors and the note trustee about the proposed financing and received no objections. A hearing on the request has not yet been scheduled at the US Bankruptcy Court in Tampa. Anchor Glass“ may not need the DIP loan for long. On 1 March 2006 the company won bankruptcy court approval to send its disclosure statement to creditors for a vote. A confirmation hearing for the reorganization plan has been scheduled for 17 April 2006. Anchor Glass has filed for bankruptcy three times in the past 10 years, most recently on 4 August 2005.