Ryan
02-06-2003, 06:30 PM
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Cannondale For Sale
Tuesday February 4, 2:40 pm ET
By Marc Hopkins, Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--Bike manufacturer Cannondale Corp. has received interim approval from the bankruptcy court handling its Chapter 11 proceedings to borrow up to $4.9 million to keep its business running.
The debtor-in-possession loan is provided by CIT Group/Business Credit Inc. and noteholder Pegasus Partners II L.P., according to court papers obtained Tuesday.
A final hearing on the company's loan package has been scheduled for Feb. 25 in the U.S. Bankruptcy Court in Bridgeport, Conn.
Under the financing deal, Cannondale is required to repay CIT Group $688,900 in advances made prior to its bankruptcy.
Court papers also said that Pegasus is willing to advance the company 50% of the money it needs to operate in connection with a budget that was worked out between Pegasus and CIT Group.
Cannondale already owes $19.5 million to CIT Group from prebankruptcy loans and also owes about $25 million to Pegasus in prepetition loans, court papers said.
In a related development, the company is asking the court to approve a so- called stalking horse agreement to sell its assets.
Often in bankruptcy court transactions, firms that are interested in buying the bankrupt company's assets before an auction is held are referred to as "the stalking horse" because they set the threshold for other offers.
The property for sale includes the company's bicycle and motorcycle assets, which can be sold together or separately. Court papers said an initial deposit of $500,000 is needed to purchase all the assets with a total price tag of $60 million. Other parties wishing to bid on both sets of assets must start the bidding process at $250,000.
Interest in the bicycle assets alone would also require an initial deposit of $500,000, with a total price tag of $57.2 million. Other interested parties would have to start bidding at $250,000.
The motorcycle assets alone would require an initial deposit of $250,000, with a total price tag of $2.8 million. The bidding would start at $100,000.
Court papers said the bids are due by March 11 and should be sent to Cannondale's offices in Bethel, Conn. The auction is scheduled to take place on March 13 at Cannondale in Bethel.
The proposed buyer, who isn't identified in court documents, is requesting a breakup fee of $1.3 million if another party submits the winning bid.
Court papers also said that if the assets are sold separately, $1.2 million has been allotted for the bicycle assets and $58,500 has been allotted for the motorcycle assets.
The company's Chapter 11 petition, filed last Wednesday, listed $114 million in assets and $105 million in debts.
Cannondale manufactures high-performance bicycles. The company's 2003 bicycle line includes about 89 models, all of which are hand-assembled and constructed with hand-welded aluminum frames.
In May 2000, the company started to produce the Cannondale MX400, a high- performance off-road racing motorcycle.
Cannondale For Sale
Tuesday February 4, 2:40 pm ET
By Marc Hopkins, Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--Bike manufacturer Cannondale Corp. has received interim approval from the bankruptcy court handling its Chapter 11 proceedings to borrow up to $4.9 million to keep its business running.
The debtor-in-possession loan is provided by CIT Group/Business Credit Inc. and noteholder Pegasus Partners II L.P., according to court papers obtained Tuesday.
A final hearing on the company's loan package has been scheduled for Feb. 25 in the U.S. Bankruptcy Court in Bridgeport, Conn.
Under the financing deal, Cannondale is required to repay CIT Group $688,900 in advances made prior to its bankruptcy.
Court papers also said that Pegasus is willing to advance the company 50% of the money it needs to operate in connection with a budget that was worked out between Pegasus and CIT Group.
Cannondale already owes $19.5 million to CIT Group from prebankruptcy loans and also owes about $25 million to Pegasus in prepetition loans, court papers said.
In a related development, the company is asking the court to approve a so- called stalking horse agreement to sell its assets.
Often in bankruptcy court transactions, firms that are interested in buying the bankrupt company's assets before an auction is held are referred to as "the stalking horse" because they set the threshold for other offers.
The property for sale includes the company's bicycle and motorcycle assets, which can be sold together or separately. Court papers said an initial deposit of $500,000 is needed to purchase all the assets with a total price tag of $60 million. Other parties wishing to bid on both sets of assets must start the bidding process at $250,000.
Interest in the bicycle assets alone would also require an initial deposit of $500,000, with a total price tag of $57.2 million. Other interested parties would have to start bidding at $250,000.
The motorcycle assets alone would require an initial deposit of $250,000, with a total price tag of $2.8 million. The bidding would start at $100,000.
Court papers said the bids are due by March 11 and should be sent to Cannondale's offices in Bethel, Conn. The auction is scheduled to take place on March 13 at Cannondale in Bethel.
The proposed buyer, who isn't identified in court documents, is requesting a breakup fee of $1.3 million if another party submits the winning bid.
Court papers also said that if the assets are sold separately, $1.2 million has been allotted for the bicycle assets and $58,500 has been allotted for the motorcycle assets.
The company's Chapter 11 petition, filed last Wednesday, listed $114 million in assets and $105 million in debts.
Cannondale manufactures high-performance bicycles. The company's 2003 bicycle line includes about 89 models, all of which are hand-assembled and constructed with hand-welded aluminum frames.
In May 2000, the company started to produce the Cannondale MX400, a high- performance off-road racing motorcycle.