New deal seeks to salvage USA Springs

An investor in the bankrupt USA Springs will front the $1.2 million needed to close a $60 million, five-year loan underwritten by a Swiss company that will enable the company to complete its controversial water bottling plant in Nottingham, according to a Tuesday filing in U.S. bankruptcy court.But the investor also wants money.USA Springs said it will keep the investor’s name a secret, for reasons it will discuss in a hearing. But the filing said he is a director and minority shareholder in USA Springs.Under the proposed deal, USA Springs will return the $1.2 million deposit — cut in half from the original $2.4 million proposed last month — to the investor when the deal closes, along with a $600,000 “success fee” by the underwriter Malom Group AG. Malom, in turn, would get its own success fee of 1.5 percent of the note (roughly $900,000), an original fee (roughly $1.8 million), as well as an interest rate 420 basis points over comparable maturing U.S. treasuries.If this fails, the investor would get the $1.2 million back, plus $50,000. The fees to the insider are designed to “encourage the Investor to invest the requisite time, money, and effort to negotiate with the Debtor and perform necessary due diligence with respect to the Debtor, Malom and the Transaction.”Opponents of the USA Springs plant have sent information to various other investors in the past, questioning whether permits that were granted before the company filed for bankruptcy in 2008 are still valid.Without the right to pump 300,000 gallons of water a day out of the ground, the company estimates that the property is worth $22.4 million, enough to satisfy all creditors. Opponents of the plant argue the figure is inflated.This latest deal is one of several that USA Springs has proposed to the bankruptcy court. The others have fallen through. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW