APC Automotive Technologies entered into a restructuring support agreement with key stakeholders, including its asset-based lenders, 74% of its term loan lenders that are eligible to vote and financial sponsors.
The restructuring transaction contemplated under the restructuring support agreement will reduce APC’s outstanding indebtedness by approximately $290 million on a net basis, significantly strengthening the company’s balance sheet and enhancing financial flexibility going forward.
“The agreement with our lenders and equity sponsors represents their belief in APC’s business and their confidence in its future success,” Tribby Warfield, CEO of APC Automotive Technologies, said. “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.”
To implement the financial restructuring contemplated under the restructuring support agreement, APC Automotive Technologies 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.
APC Automotive Technologies will continue to solicit votes on its plan of reorganization during the Chapter 11 filing. Because the company’s plan has already received support from its lenders, the company expects to complete the confirmation process and emerge from bankruptcy within the next month.
In addition, APC Automotive Technologies negotiated agreements with certain of its existing term loan lenders for $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 Automotive Technologies 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, APC Automotive Technologies will continue to both receive inventory as well as take and fulfill customer orders as usual. The company also filed customary “first day” motions to facilitate its day-to-day operations during the restructuring process.
Kirkland & Ellis, Jefferies and WeinsweigAdvisors are the advisors for APC Automotive Technologies. The term loan lender group is represented by King & Spalding and FTI Consulting and the financial sponsors are represented by White & Case.
APC Automotive Technologies is a supplier of automotive, light truck and heavy-duty undercar replacement parts.