The US Bankruptcy Court gave an order to Mallinckrodt plc to obtain DIP financing on a final basis on September 21, 2023. As per the order, the debtor has been authorized to obtain a Term Loan facility in the amount of $250 million from DIP Lenders with Acquiom Agency Services LLC and Seaport Loan Products LLC acting as the administrative agent. The DIP loan would carry an interest rate of SOFR plus 8% p.a.; along with an additional 2% p.a. interest in the event of default.

As per the terms of the DIP agreement, the loan carries a backstop premium of 12%. The DIP facility would mature either on August 28, 2024 or on the effective date of the plan or on the date of consummation of the sale of substantially all assets, whichever is earlier. Adequate protection would be provided to the DIP lenders in the form of super-priority administrative expense claims which is subject to a carve-out of $15 million towards unpaid professional fees / administrative expenses and first priority lien upon and security interest in the debtor?s collateral.