KETCHIKAN (AP) -- A $10.7 million bank loan for Gateway Forest Products was approved Thursday by the Alaska Industrial Development and Export Authority. That leaves the veneer mill operator, now under Chapter 11 bankruptcy protection, one step away from getting the infusion.
''This is a very important step in the process, said Jim Erickson, president of Gateway, after the AIDEA board's 4-0 vote.
''We've gotten approval from Key Bank and Wells Fargo. The only piece left to fall into place is (U.S. Department of Agriculture) Rural Development with respect to our refinancing of the veneer mill, which is an important part of the reorganization.''
Gateway, the Ward Cove-based veneer mill operator, filed for Chapter 11 bankruptcy protection from creditors in February. Erickson said a significant part of the $10.68 million loan would go to repay Foothill Capitol Corp., Gateway's initial major lender.
The result would be lower interest rates over a longer term, thereby improving the veneer mill's balance sheet, he said. The loan package includes a $1 million line of credit that would be secured by inventory and accounts receivable, said Erickson.
In general terms, Key Bank and Wells Fargo each would provide 50 percent of the loan package. AIDEA would participate on 50 percent of Key Bank's portion of the loan, and would guarantee a portion of the credit line, said Erickson. The Agriculture Department's Rural Development program would also guarantee part of the loan.
The USDA loan application process is expected to be complete by the end of the year or early January, said Erickson.
''We're optimistic that we will get this thing done,'' he said.
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