Proactive Investors - Bens Creek Group (LON:BENB) said that the Bankruptcy Court for the Southern District of West Virginia had approved an interim debtor-in-possession financing loan from Avani Resources, its largest shareholder.
The order of the Court has authorised Avani to lend three Bens Creek companies in Chapter 11 up to US$2.0 million at an interest rate of 10.5% per annum.
A further court hearing will be held on 6 June 2024 to consider the terms of a final debtor-in-possession financing loan from Avani for US$8.865 million inclusive of the Interim DIP Loan.
The intention is for the proceeds of the Avani DIP Facility to be used to see the Chapter 11 companies through to the Section 363 Sale.
Any such disposal is expected to result in the company becoming an AIM Rule 15 cash shell.
An alternative debtor-in-possession financing proposal for US$4 million from Integrity Coal Sales was rejected by the debtor.