A. M. Castle, a global distributor of specialty metal and supply chain solutions, successfully closed its $85 million senior-secured, revolving, debtor-in-possession financing agreement with PNC Bank.
The DIP facility, announced on June 5, 2017, will allow the company to immediately reduce cash interest payments by replacing a substantial portion of its current first lien credit facilities, which carry 11.0% interest. Castle expects to use additional available capital from its cash on hand and the DIP facility to invest in growth initiatives as it approaches the completion of its prepackaged financial restructuring later this summer.
President and CEO Steve Scheinkman said, “As the company moves forward with its prepackaged proceeding, the DIP facility provides us with working capital at competitive rates, which will enable us to realize immediate, substantial cash interest savings.
“As we previously announced, Castle has also executed a commitment letter with PNC Bank for a $125 million senior-secured, revolving credit facility, anticipated to close later this summer once we complete our financial restructuring. We expect to use the new ABL facility not only to refinance certain existing secured debt of the company and any DIP facility borrowing, but also to provide additional capital to support our uninterrupted operations and growth investments.”