Birmingham Steel Corp. won final approval of a $40 million debtor-in-possession financing agreement with Bank of America N.A. and other lenders.
The loan, for which it won interim approval last month, allows Birmingham to move ahead with its acquisition by Nucor Corp. As part of the buyout Nucor will acquire Birmingham's melt shop in Memphis, which the company shuttered two years ago.
Birmingham says it will use the loan to fund operating expenses and pay critical vendors such as scrap metal suppliers, utilities and alloy manufacturers.
Birmingham Steel says it needs the loan to fund expenses until it can win approval of the proposed sale to Charlotte, N.C.-based Nucor Corp.
Prior to the debtor's Chapter 11 filing, Nucor reached an agreement to buy the Birmingham, Ala.-based steel company for $615 million in cash. The deal is designed to be completed through a pre-arranged Chapter 11 reorganization plan.
Included in the deal are Birmingham Steel's four operating mills in Birmingham, Ala.; Kankakee, Ill.; Seattle; and Jackson, Miss.; and a Birmingham corporate office and the non-operating mill in Memphis. Included in the purchase price is $120 million of inventory and accounts receivable that Nucor is buying. Memphis (Tenn.) Business Journal