BMHC Takes a DIP and Goes for the Extra Yard or Two
From PROSALES, by Andy Carlo: Repeatedly, we report on the toll over-levering during good times has taken after the good times turned bad.
The Building Materials Holding Corporation story of a rising star now fallen is more of the same. ProSales senior editor Andy Carlo’s update to his initial report –on BMHC’s filing for Chapter 11 bankruptcy protection–carries tidings that the nation’s 6th largest lumber and building materials player has secured a court thumbs up to fight another day, or month, or year, or more.
BMHC chairman & CEO Robert Mellor, click to access company "restructure" IR site.
Following the court order, the Boise, Idaho dealer and construction services provider can continue to meet its obligations to customers, including the fulfillment of contracts and honoring warranties, while meeting its obligations to suppliers, employees, and subcontractors.
At Wednesday’s hearing, the court granted initial approval for BMHC to access a new $80 million in debtor-in-possession financing facility from Wells Fargo Bank and other lenders. BMHC has been permitted by the court to use $40 million of the credit facility immediately, with the full $80 million available upon final court approval.
In a statement issued by BMHC, the company said that it expects the new financing to “provide ample liquidity to meet its ongoing obligations to employees, customers, and suppliers during the reorganization process.” Altogether, BMHC expects the reorganization process to take about three to four months.
Here, from the company’s Web site, is chairman and CEO Robert Mellor’s statement:
“We are very pleased that the Bankruptcy Court in Delaware has approved our First Day Motions and our DIP financing, which allow us to continue business as usual and to meet our obligations to our customers, suppliers and employees,” said Robert E. Mellor, Chairman and Chief Executive Officer. “All of our operations are open, and we are continuing to serve our customers with the same focus and dedication as always. We appreciate the support we have seen from both our customers and suppliers as we move forward with this process to make BMHC financially stronger for the long term.”
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