To: Area51 who wrote (162 ) 8/29/2012 7:17:59 PM From: billgatesisevil 1 Recommendation Read Replies (1) | Respond to The DIP loan had some conditions attached to it in ATPG's case. In general, the purpose of the dip loan is to fund operations between the filing and the exit for general corporate purposes. Basically, it is a replacement for the revolver that can no longer get drawn. In this case, the lenders put some restrictions on the DIP since they were owners of the revolver. In return for extending further credit, the conditioned the DIP on some of it being used to pay down the first lien loans (the old revolver) on exit. So, the amount of the DIP that is actually usable by ATPG is less than 600 MM, 250 MM sticks in my mind. I suspect at exit, that the DIP used to pay down the old revolver gets rolled over into a new revolver of some sort. Alternately, ATPG might find some other folks to do the revolver. The lenders did the DIP with this condition so that they would be promoted above everyone and their elephant. There was talk about having another condition of the DIP be that PB would resign. They didn't attach that one, but I feel that his days are numbered along with the CFO's days. PB may/may not understand the oil drilling business, but he sure as heck has botched the cash flow side of the company.
