UPDATE 1-VeraSun gets final court OK for bankruptcy loan
NEW YORK |
NEW YORK Dec 4 (Reuters) - Ethanol producer VeraSun Energy Corp VSUNQ.OB received final court approval on Thursday for $196.6 million in debtor-in-possession (DIP) financing, that will allow it to continue operating during its bankruptcy.
The company said its DIP financing matures on November 3, 2009.
VeraSun filed for bankruptcy protection in October, citing significant losses in the third quarter of 2008 from a dramatic spike in its corn costs.
VeraSun, which said it had been unable to find bankruptcy financing in the traditional way, had taken the rare step of "priming" existing lenders for its DIP financing. The funding is being provided from a group of lenders that had given VeraSun pre-bankruptcy loans.
In a bankruptcy case, DIP loans are given some of the highest priority, which allows lenders to get repaid before most other creditors. (Reporting by Emily Chasan; Editing by Anshuman Daga)
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