A. M. Castle & Co., a global distributor of specialty metal and supply chain solutions, announced that it has executed commitment letters with PNC Bank, National Association for (1) a $125 million senior-secured, revolving credit facility that will close when Castle completes its prepackaged financial restructuring later this summer and will be utilized, in part, to repay certain existing debt; and (2) an $85 million senior-secured, revolving, debtor-in-possession credit facility, as needed, during the Company's restructuring. The closing of the New ABL Facility and the DIP Facility are each subject to the closing conditions set forth in the respective commitment letters, including, without limitation, definitive documentation and bankruptcy court approval.
Executive Vice President and Chief Financial Officer Patrick Anderson commented, "We believe that reaching these agreements with PNC, an established lender to the metals industry, will be extremely advantageous to Castle as we complete our financial restructuring, allowing us to emerge a financially stronger company. PNC's commitment to providing working capital at competitive rates will significantly reduce our cost of capital resulting in substantial cash interest savings of at least 70% from our current annualized rate of approximately $36 million which will help us deliver on our promise of growing our partnerships with our vendors and improving our service to our customers."
As previously announced, the Company has solicited votes on its proposed Prepackaged Joint Chapter 11 Plan of Reorganization and expects to announce the results of the solicitation shortly. The Plan, supported by the Company's existing liquidity and further buttressed by the DIP Facility, upon a closing thereof, provides that the Company will continue to operate business as usual, including paying all vendors in a timely manner, delivering product to its customers without any change in quality or on-time performance, and continuing to compensate its employees competitively and timely. When Castle completes its proceeding later this summer, anticipated to be within 45 to 60 days of commencement, the New ABL Facility will be used to refinance certain existing secured debt of the Company, any DIP Facility borrowing and will provide additional capital, supplementing funds contributed by certain new money notes, to support the Company's uninterrupted operations as it emerges from bankruptcy court protection.
President and CEO Steve Scheinkman concluded, "We are very pleased that the path we laid out on April 7 continues to progress as we envisioned. These agreements with PNC are another step in delivering what we promised to all our stakeholders regarding the restructuring, and we look forward to announcing our next steps in the coming weeks and completing the restructuring this summer, as we originally planned."