HUNTERSVILLE, N.C. — American Tire Distributors Inc. said late Oct. 5 that holders of a majority of its term loans have agreed to support the restructuring measures it proposed Oct. 4 in its Chapter 11 bankruptcy protection filing.
"We are pleased to have the support of our term-loan lenders for our previously announced restructuring support agreement, which will help to facilitate a fully consensual court-supervised process," ATD CEO Stuart Schuette said.
"The strong support by our key financial stakeholders for our recapitalization plan represents an important vote of confidence in our business and our future. We intend to move quickly through this court-supervised process and continue our ongoing transformation to lead change in our industry."
The announced measures are designed to reduce ATD's debt by approximately $1.1 billion and increase its financial flexibility.
Under the terms of the agreement, which is subject to court approval and final documentation, the term-loan lenders will, among other things:
- Provide half of the $250 million in new financing to support ATD's continuing operations;
- Extend the maturity of the term loan facility by three years; and
- Participate in exit financing upon ATD's completion of the court-supervised process.
ATD also announced it has received court approval of all of its key "first day" motions that will support the business.
The approved motions give the company the authority to, among other things, enter into post-petition financing, continue to use its cash-management system and continue to pay critical suppliers and vendors in full under pre-existing trade terms.
ATD said it intends to meet its obligations in the ordinary course and expects its operations to continue uninterrupted throughout the court-supervised process.
"The court's approvals of our first-day motions are an important step forward that will allow the company to continue meeting our obligations and providing our customers the unparalleled selection and service they have come to expect from us," Mr. Schuette said, who also thanked ATD employees for their commitment and support.
ATD has posted information relevant to the restructuring on a dedicated web site: atdrecapitalization.com.