RathGibson wins court approval of $80 mil loan

RathGibson Inc., the steel-tube maker controlled by DLJ Merchant Banking Partners, won permission from U.S. Bankruptcy Judge Christopher Sontchi in Wilmington, Delaware, to borrow as much as $80 million to help fund operations as it restructures.

Sontchi granted final approval of the loan at a hearing yesterday. The loan will be provided by affiliates of Wayzata Investment Partners LLC, Eaton Vance Corp. and BlackRock Inc.

The loan is necessary to fund operations and will give customers, vendors and employees "confidence necessary to continue operating," RathGibson said.

The company, based in Lincolnshire, listed assets of more than $305 million and debt of $319 million in a July 13 court filing. It said it has as many as 5,000 creditors.

RathGibson said it negotiated a reorganization plan with lenders who own 73 percent of its $200 million in senior notes that would give noteholders the majority of the company's stock.

The case is In re RathGibson Inc., 09-12452, U.S. Bankruptcy Court, District of Delaware (Wilmington).