Near Intelligence, a privacy-led data intelligence company, and certain of its subsidiaries voluntarily initiated Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the District of Delaware and will seek to sell its assets through a court supervised sales process. The company has also entered into a debtor-in-possession financing agreement with its existing secured lenders, affiliates of Blue Torch Finance, to provide up to $16 million of operating capital. In addition, the company intends to file a motion on or shortly after the petition date seeking, among other things, approval of sale procedures with respect to the sale of substantially all of its assets that provides for the company’s existing secured lenders to serve as a “stalking horse” bidder.
The debtors have filed various “first day” motions with the bankruptcy court requesting customary relief that will enable them to transition into Chapter 11 while continuing to operate its business in the ordinary course without material disruption, including seeking authority to obtain debtor-in-possession (DIP) financing and pay employee wages and benefits without interruption.
The debtors’ existing secured lenders are supportive of the Chapter 11 proceeding and court supervised sale process. The secured lenders have committed to provide the debtors with DIP financing and have submitted a binding “stalking horse” bid to acquire their assets.
DIP Financing
In order to provide necessary funding during the Chapter 11 proceeding, Near has obtained a multi-draw DIP financing facility in an aggregate principal amount of up to $16 million from its existing secured lenders. Upon approval by the bankruptcy court, the DIP financing is expected to provide Near with the necessary liquidity to operate in the normal course and meet obligations to its employees, vendors and customers incurred during the Chapter 11 proceeding while executing on the sales process.
Sales Process
Prior to the Chapter 11 filing, and subject to bankruptcy court approval, the company entered into a “stalking horse” asset purchase agreement with Blue Torch, to acquire substantially all of the assets of the company in the form of a credit-bid of not less than $50 million, comprised of all amounts Near owes to its lenders under the $ 16 million DIP facility and not less than $34 million of amounts Near owes to its lenders under the prepetition senior secured credit facility. The transaction is part of a sale process under Section 363 of the bankruptcy code that will be subject to compliance with agreed upon and bankruptcy court-approved bidding procedures allowing for the submission of higher or otherwise better offers, and other agreed-upon conditions. In addition, the closing of the transaction will be subject to the satisfaction or waiver of customary closing conditions. In accordance with the sale process under Section 363 of the bankruptcy code, notice of the “stalking horse” bid will be given to third parties and competing bids will be solicited. The company will manage the bidding process and evaluate any bids received, in consultation with its advisors and as overseen by the bankruptcy court.
Near is represented by Willkie Farr & Gallagher and Young Conway Stargatt & Taylor, as counsel, Ernst & Young as restructuring advisor and GLC Advisors & Co.as restructuring investment banker.
