Shiloh Industries (SHLO) Stock Gains In Multiples On Court Approval

Shiloh Industries SHLO Stock News

Shiloh Industries, Inc. (NASDAQ: SHLO) is rocketing in the market today, trading on gains in multiples, rather than percentages. The gains come after the bankruptcy-tattered company announced that it has received approval from the Bankruptcy Court surrounding its First Day motions. Here’s what’s going on:

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SHLO Stock Rockets On Motion Approvals

In the press release, Shiloh Industries said that the United States Bankruptcy Court for the District of Deleware has approved all First Day motions related to the Company’s voluntary Chapter 11 petitions.

As a result of the approval, the company now has access to $18.1 million of the $123.5 million in committed debtor-in-possession financing from its existing lenders. SHLO said that these funds consist of about $23.5 million new money subfacility and a roll-up of approximately $100 million of commitments under the Company’s existing revolving credit facility.

In the release, the company said that these funds will be used to support the business throughout the sale process.

Moreover, the Court has approved the company’s ability to pay employee wages and benefits without interruption, honor customer commitments, and manage day-to-day operations.

In a statement, Cloyd J. Abruzzo, Interim CEO at SHLO, had the following to offer:

We are pleased to have received the Court authorization we need to continue our operations during the sale process. As we move through this process, we look forward to continuing to serve our customers and meet their needs as the automotive industry recovers from the COVID-19 pandemic. I would also like to thank our employees for their continued dedication to our company.

This Is Big News

The news released by Shiloh Industries this morning proved to be overwhelmingly positive. It means that the company will have the funds needed to push through to the sale. Don’t forget, the company recently entered into a stalking horse sotck and asset purchase agreement with Grouper Holdings. So, the goal is to make it to the sale, which is why the bankruptcy was filed.

With SHLO receiving approvals on all first-day motions, it seems more likely that the company will make it to the sale.

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