Intermet Corp. received U.S. Bankruptcy Court approval for $20 million in debtor-in-possession financing.
The Troy, Mich.,-based automotive castings supplier had been using cash collateral. Intermet reached a deal with Deutsche Bank Trust Co. Americas and The Bank of Nova Scotia for DIP financing of up to $60 million.
The company needs bankruptcy court approval to use the $40 million remaining. And before that, the DIP lenders want an updated budget and financial projections.
Intermet filed for Chapter 11 bankruptcy protection Sept. 29, citing rising raw material costs.
The company has suffered from a severe spike in scrap steel, its primary raw material. Scrap steel cost about $210 a ton at the end of 2003 and now sells for about $395 a ton.
A net loss of between $19 million and $24 million is expected for the third quarter. For the nine months ending Sept. 30, the company expects a net loss of between $33 million and $38 million.
Intermet's stock was delisted from the Nasdaq exchange last week, a common result of bankruptcy.