Interim DIP Financing Approved for Xtera Communications, Inc.
November 17, 2016 at 11:00 pm EST
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The US Bankruptcy Court gave an order to Xtera Communications, Inc. to obtain DIP financing on an interim basis on November 18, 2016. As per the order, the debtor has been authorized to obtain a term loan facility in the amount of $7.41 million from H.I.G. Europe - Neptune, Ltd with Wilmington Trust, N.A acting as the administrative agent. The DIP loan would carry an interest rate of LIBOR plus 6% p.a., with a LIBOR floor of 1% p.a., along with an additional 2% p.a. interest in the event of default. As per the terms of the DIP agreement, the loan carries a commitment fee of 0.50% p.a. and backstop premium in an amount equal to 0.50% of the aggregate amount of the DIP commitments on the closing date. The DIP facility would mature either on 13 weeks following the petition date or on the effective date of the plan or on the date of consummation of the sale of substantially all assets, whichever is earlier. Adequate protection would be provided to the DIP lenders in the form of super-priority administrative expense claims which is subject to a carve-out towards unpaid professional fees / administrative expenses and first priority lien upon and security interest in the debtor’s collateral. The proceeds from the DIP facility shall be used to pay all fees due to DIP lenders and DIP agent, all reasonable pre- and post-petition professional fees and expenses, to provide working capital to the debtors and to fund the administration costs of the Chapter 11 case. The final DIP hearing has been scheduled for December 15, 2016.
Xtera Communications, Inc. is a provider of subsea systems and telecoms technology. The Company supplies unrepeatered and repeatered networks, through optical amplifiers to deliver traffic directly in inland. Its portfolio of services includes system design, project planning and feasibility studies, on-shore and off-shore security during installation, desktop study, route survey and cable engineering, in-house permitting service, route clearance, shore end and installation operations, post lay inspection and burial, landing route and station development, testing and commissioning, training, and maintenance and operational support. Its products include submarine system technology, repeater units, branching units, open systems, open systems gateway, network management system, optima terminal equipment and unrepeatered systems. It offers Nu-wave Optima platform, which provides a modular platform that serves terrestrial, unrepeatered and ultra-long span submarine applications.