Enters into Restructuring Support Agreement to
Eliminate Approximately $1.2 Billion of Debt
Files Voluntary Prepackaged Petitions for
Chapter 11 Relief to Implement Transaction
Global Operations Across Brands Expected to
Continue Without Interruption During Chapter 11 Cases with All
Unsecured Creditors to be Paid in Full
Wheel Pros, LLC (d/b/a Hoonigan) and certain of its North
American-based affiliates (collectively “Hoonigan” or the
“Company”), a leading provider of aftermarket vehicle enhancements,
today announced that it has commenced an in-court financial
restructuring process to position it to drive long-term growth. The
Company has entered into a Restructuring Support Agreement (“RSA”)
with a majority of its debtholders through which it expects to
eliminate approximately $1.2 billion of the Company’s debt and
secure up to approximately $570 million of new capital,
substantially improving the Company’s balance sheet and financial
position.
“Today’s announcement marks an important step forward for
Hoonigan that will enable us to advance our industry leading
position in the growing automotive aftermarket sector,” said Vance
Johnston, CEO of Hoonigan. “With a significantly strengthened
balance sheet and new capital, this transaction will position us to
invest in innovation and further drive financial performance. With
the strong support of our financial partners, we remain
laser-focused on providing cutting-edge products and best-in-class
service to our partners throughout this process.”
In order to implement the RSA, Hoonigan has filed voluntary
petitions for Chapter 11 relief in the U.S. Bankruptcy Court for
the District of Delaware (the “Court”). As contemplated under the
RSA, the Company expects to emerge under the majority ownership of
a group of its current lenders, who recognize the potential of the
automotive aftermarket industry and are confident in Hoonigan’s
ability to continue to operate at its forefront. The RSA
contemplates a swift in-court restructuring, with emergence from
Chapter 11 anticipated within two months.
Importantly, the RSA provides for a consensual, prepackaged
restructuring proceeding, including a motion seeking to approve
$110 million term loan debtor-in-possession (“DIP”) facility and a
$175 million ABL DIP facility. The Company anticipates that this
will allow the business to continue operating in the ordinary
course during the restructuring without impacting trade creditors,
customers, employees, vendors, or suppliers and will allow the
Company to honor its commitments to strategic partners. Further,
the Company’s operations outside of North America are not part of
the Court-supervised restructuring process.
Additional information regarding the Chapter 11 process is
available at https://cases.stretto.com/WheelPros. Stakeholders with
questions can contact the Company’s claims agent, Stretto, by
calling (855) 371-7511 (U.S. toll free) or +1 (714) 716-1978
(International) or emailing TeamWheelPros@stretto.com.
Advisors
Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones
LLP are serving as legal counsel, Houlihan Lokey, Inc. is serving
as investment banker, Alvarez & Marsal is serving as financial
advisor, and C Street Advisory Group is serving as strategic
communications advisor to the Company.
About Hoonigan
Hoonigan serves the automotive enthusiast industry with
entertaining content and a wide selection of vehicle enhancements
from its portfolio of lifestyle brands, including Fuel Off-Road,
American Racing, KMC, Morimoto, TeraFlex, Rotiform, and Black
Rhino. Utilizing its expanding global network of distribution
centers spanning North America, Australia, and Europe, Hoonigan
serves over 30,000 retailers. It has a growing e-commerce presence
to provide enthusiast consumers with access to a variety of
aftermarket enhancements including wheels, suspension, lighting,
and accessories. More information is available at
www.hoonigan.com.
Forward Looking Statements
This press release contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of Hoonigan and certain plans and objectives with respect
thereto. These forward-looking statements can be identified by the
fact that they do not relate only to historical or current facts.
Forward-looking statements often use words such as "anticipate",
"target", "expect", “enable,” "estimate", "intend", "plan", "goal",
"believe", "hope", "aims", "continue", "will", "may", "should",
"would", "could", or other words of similar meaning. These
statements are based on assumptions and assessments made by the
Company and its perception of historical trends, current
conditions, future developments and other factors. By their nature,
forward-looking statements involve risk and uncertainty, because
they relate to events and depend on circumstances that will occur
in the future and the factors described in the context of such
forward-looking statements in this document could cause actual
results and developments to differ materially from those expressed
in or implied by such forward-looking statements. Although it is
believed that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to have been correct and you are therefore
cautioned not to place undue reliance on these forward-looking
statements which speak only as at the date of this document. The
Company does not assume any obligation to update or correct the
information contained in this document (whether as a result of new
information, future events or otherwise), except as may be required
by applicable law.
There are several factors which could cause actual results to
differ materially from those expressed or implied in the
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are changes in the global, political,
economic, business, competitive, market, supply chain and
regulatory forces, future exchange and interest rates, changes in
tax rates and any future business combinations or dispositions,
uncertainties and costs related to the RSA and the Chapter 11
process, including, among others, potential adverse effects of the
Chapter 11 process on the Company’s liquidity and results of
operations, including with respect to its relationships with its
customers, distribution partners, suppliers and other third
parties; employee attrition and the Company’s ability to retain
senior management and other key personnel due to the distractions
and uncertainties inherent in the Chapter 11 process, including due
to any "prepackaged" Chapter 11 process; the impact of any cost
reduction initiatives; any other legal or regulatory proceedings;
the Company’s ability to obtain operating capital, including
complying with the restrictions imposed by the terms and conditions
of any DIP financing, such as the financing mentioned herein; the
length of time that the Company will operate under Chapter 11
protection, including due to any "prepackaged" Chapter 11 process;
the timing of any emergence from the Chapter 11 process; and the
risk that any plan of reorganization resulting therefrom may not be
confirmed or implemented at all. Please see the plan of
reorganization and related disclosure statement (as may be amended,
modified or supplemented) that may be filed with the Court for
additional considerations and risk factors associated with the
Company’s Chapter 11 process.
Nothing in this press release is intended as a profit forecast
or estimate for any period and no statement in this press release
should be interpreted to mean that the financial performance for
the Company for the current or future financial years would
necessarily match or exceed its historical results.
Further, this press release is not intended to and does not
constitute and should not be construed as, considered a part of, or
relied on in connection with any information or offering
memorandum, security purchase agreement, or offer, invitation or
recommendation to underwrite, buy, subscribe for, otherwise
acquire, or sell any securities or other financial instruments or
interests or any other transaction.
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Media C Street Advisory Group Hoonigan@thecstreet.com