APC Automotive Technologies, LLC, together with certain of its subsidiaries, announced that it has entered into a comprehensive Restructuring Support Agreement (the RSA) with key stakeholders, including its asset-based lenders, 74 percent of its term loan lenders that are eligible to vote, and significant financial sponsors (the RSA parties).
The restructuring transaction contemplated under the RSA will reduce APC’s outstanding indebtedness by approximately $290 million on a net basis, strengthening the company’s balance sheet and enhancing financial flexibility going forward, the company says. The RSA represents the commitment of the RSA parties to support a comprehensive restructuring of the company’s balance sheet.
“The agreement with our lenders and equity sponsors represents their belief in APC’s business and their confidence in its future success,” said Tribby Warfield, chief executive officer, APC Automotive Technologies. “We are fortunate that APC possesses a market-leading underbody portfolio of highly regarded brands including Centric Parts, StopTech, AP Emissions, Durafit, and Eastern Catalytic, strong market recognition, and an exceptional customer base. Most importantly, we have an amazing team that is committed to providing quality products and excellent service to the industry.”
“This restructuring was designed to ensure that our ongoing business and service to customers continues without interruption, and I am confident that the steps we are announcing today will enable the company to further enhance its ability to serve customers and invest in additional growth for years to come,” said Warfield.
To implement the financial restructuring contemplated under the RSA, APC Automotive Technologies has filed voluntary petitions for reorganization pursuant to chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on June 3, 2020.
The company will continue to solicit votes on its plan of reorganization during the chapter 11 filing. Because the company’s plan has already received significant support from its lenders, APC Automotive Technologies expects to complete the confirmation process and emerge from bankruptcy within the next month.
In addition, the company has negotiated agreements with certain of its existing term loan lenders to provide APC $50 million of additional financing in the form of debtor-in-possession financing, which will roll into an exit term loan facility. This will ensure APC’s ability to operate on an uninterrupted basis.
APC will continue to operate in the ordinary course during the restructuring process, with adequate liquidity to meet its financial obligations to vendors, suppliers, and employees. The company expects to continue making payments to these parties without interruption. Furthermore, the company will continue to both receive inventory as well as take and fulfill customer orders as usual. The company has also filed customary “first day” motions to facilitate its day-to-day operations during the restructuring process.
Kirkland & Ellis LLP, Jefferies LLC, and WeinsweigAdvisors LLC are the advisors for the company. The RSA parties include, among others: Term Loan Lender Group represented by King & Spalding LLP and FTI Consulting and the financial sponsors represented by White & Case LLP.
