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Business Capital Arranges $8.5MM DIP Financing for Pacific Steel Casting

April 22, 2014, 07:13 AM
Filed Under: Metals and Mining

Business Capital has secured an $8.5 Million D.I.P loan for Pacific Steel Casting (PSC), one of the largest independent steel casting companies in the U.S. that makes carbon, low-alloy and stainless steel castings for U.S. and international customers, largely for heavy-duty trucks and construction equipment. PSC, a major employer based in Berkeley, CA since 1934, is in its fourth generation of ownership. The company recently filed for Chapter 11 bankruptcy protection to enable it to restructure its liabilities and remain in operation. Binder & Malter LLP, a law firm specializing in bankruptcy for over 25 years, is representing PSC through the chapter 11 filing process.

Business Capital was referred in by Pacific Steel’s prior lender to arrange new financing. “We are so pleased to have secured this credit facility for Pacific Steel,” said Chuck Doyle, Managing Director of Business Capital. “This company’s long time employees, suppliers and customers are their number one concern and this new financing will ensure a seamless transition into the next phase of Pacific Steel Casting’s opportunities. We were able to understand and present the merits of the company’s situation (reorganization or sale of the company) which was critical in getting the immediate working capital needed to support ongoing operations and maintain vendor and customer confidence during the Chapter 11 proceedings.”

After a government audit forced the company to layoff nearly 200 undocumented workers and pay heavy fines, PSC struggled to replace workers while incurring higher workers compensation insurance premiums and significant additional costs associated with settling an employee class-action lawsuit related to the timing of lunch breaks. The Company continues to operate in Berkeley and has a healthy backlog of new orders.

“Pacific Steel remains open for business,” said chief operating officer Chuck Bridges. “Acquiring this funding will allow the company to continue to serve its customers, preserve jobs and give us some runway to restructure and move forward on stronger footing.”

Business Capital is a leading commercial finance and debt restructuring firm specializing in securing customized debt based solutions for rapidly growing as well as challenged small and middle market companies nationwide who require a unique, timely and tailored financing structure to address their particular needs, especially in situations where conventional capital sources are not an option.

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