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CVO Social => Other Topics => Topic started by: Unbalanced on November 16, 2017, 09:39:29 PM
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(http://media.kuryakyn.com/6076/Press%20Releases/Kuryakyn/Kury_2016_Header%20and%20Footer%20Graphics.png)
Dear Valued Business Partner:
We want to let you know about an important action our parent company, Motorsports Aftermarket Group (MAG), is undertaking. On November 15, 2017, MAG announced that it is implementing a debt restructuring to eliminate approximately $300 million in debt. MAG is using the Chapter 11 process to facilitate this.
First and foremost, we are open for business and are operating just as before.
You, our valued customer, will not see any interruption in the flow of merchandise and there will be no change in the way we operate. In other words, we will continue to uphold our obligations to you, just as we always have. Frankly, you will likely not even be aware that the restructuring is happening in the background.
MAG plans to move through this process swiftly, emerging from Chapter 11 a stronger, more viable and competitive Company.
We look forward to continuing to providing you with a wide selection of quality products and exceptional service for many years to come.
Best regards,
Holger Mohr
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The days of hanging thousands of dollars of chrome on a bike to create a garbage wagon are long gone. The pain for H-D and the rest of the related aftermarkets is only just beginning and it’s about to get very dark.
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It doesnt mean much till you look at this.
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Well this could bring some industry opportunities as well. Seems MAG is an acquisition machine and likely doesn’t bring enough additional value to drive organic growth.
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https://www.asphaltandrubber.com/news/motorcycle-aftermarket-group-mag-chapter-11-refinance/ (https://www.asphaltandrubber.com/news/motorcycle-aftermarket-group-mag-chapter-11-refinance/)
$440 million in debt, trying to get rid of $300 million. Bad juju.
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Just the result we'd expect from a declining motorcycle market. They might do better financially selling trikes, reverse mortgages, walkers, Flomax, and rascals.
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A long list of the aftermarket businesses.
https://www.donlinrecano.com/Clients/vhc/Index
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Just the result we'd expect from a declining motorcycle market. They might do better financially selling trikes, reverse mortgages, walkers, Flomax, and rascals.
Nah, these are some big boys playing...
Curious to see who takes the brunt of this Fiasco??
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"Restructuring debt" sounds better than saying we're sticking creditors for $300M. I love how they always make these things sound as if it's nothing special. Now let's hear an opinion from the stickee's.
Jerry :)
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More info here
https://www.cvoharley.com/smf/index.php?topic=114101.0;topicseen
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"Restructuring debt" sounds better than saying we're sticking creditors for $300M. I love how they always make these things sound as if it's nothing special. Now let's hear an opinion from the stickee's.
Jerry :)
exactly!!!
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Another article on the "restructuring",,, appears to be a debt for equity swap,,, 'could be beneficial for the debt holders in the long run...
Nov 16, 2017
Motorsport Aftermarket Group (MAG) Files For Bankruptcy To Eliminate $300 Million In Debt
© 2017, Roadracing World Publishing, Inc. From a press release issued by Motorsport Aftermarket Group (MAG):
Motorsport Aftermarket Group Implements Debt Recapitalization Over $300 Million of Debt to be Eliminated; Operations Unaffected
Customer Services Continue Uninterrupted
Coppell, TX – November 15, 2017 – Motorsport Aftermarket Group (“Company” or “MAG”), a leading independent manufacturer and distributor of branded aftermarket products and online retailer for the powersports industry, today announced it is implementing a comprehensive, consensual recapitalization to eliminate approximately $300 million in debt through a debt for equity exchange supported by in excess of 90 percent of the principal amount of the Company’s prepetition first lien secured lenders, and its asset-backed lenders.
“Through this process, which we have been working very hard on with our key lenders to accomplish over the past month, we will de-lever our balance sheet allowing us to more effectively compete in today’s evolving powersports market. MAG’s businesses will continue to operate unaffected and the Company has sufficient liquidity to fund operations. Customer service and sales will continue, employees will receive wages and benefits as before, and vendors and suppliers will be paid in the ordinary course of business going forward,” said CEO Andrew Graves.
To implement the recapitalization, the Company and certain of its affiliates have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the District of Delaware. The Company expects to move through the process quickly, and emerge in the first quarter 2018 as a stronger, better capitalized and competitive company.
To support operations through this process, MAG has secured up to $135 million in debtor-in-possession (DIP) financing from certain of its current secured lenders.
“The U.S. Powersports market has been in persistent decline for the past few years. In response, MAG has been working diligently to adjust to the changing landscape and has implemented many initiatives to parallel today’s market. Unfortunately, the Company’s long-term debt continues to be an impediment to success,” added Graves. “As such, we believe that by availing the Company to the chapter 11 process, MAG has chosen the most efficient and expeditious way to right-size our balance sheet for the long term so that we remain an industry leader for many years to come. We and our key creditors are committed to what will hopefully be a short bankruptcy case.”
Key Elements of the Recapitalization:
- Employee wages and benefits will be paid in full in the ordinary course without interruption.
- Customer orders will be fulfilled consistent with past practice without delay or disruption.
- Vendors and suppliers will be paid timely and in full going forward.
- Company will emerge with new owners and a new board of directors.
Monomoy Capital Partners, BlueMountain Capital and Contrarian Partners will lead the new owners group, and have deep experience in consumer products and lifestyle companies including distribution, retail and manufacturing. “We are encouraged to have access to the resources the new owners bring, by their passion for the powersports industry, and for their shared vision for MAG’s future. Looking forward, MAG will be able to more aggressively capitalize on market and growth opportunities given our strong balance sheet post recapitalization,” said Graves.
“Importantly, MAG is very appreciative of its employees who have remained committed and professional during what has been a challenging few years. Moreover, we are grateful to our valued vendors and suppliers who have remained our partner, and we thank our customers who continue to trust and rely on us. We look forward to continuing to work together for many years to come,” added Graves.
Court filings as well as other information related to the restructuring are available at www.donlinrecano.com/vhc or by calling the restructuring information hotline, (800) 581-5607 (toll free in North America) or (212) 771-1128 (International). Inquiries may also be submitted via e-mail to vhcinfo@donlinrecano.com.
Proskauer Rose LLP and Cole Schotz P.C. are serving as legal counsel and AlixPartners LLP is serving as financial advisor to MAG.
About Motorsport Aftermarket Group
Our mission is to build a group of brands and businesses that are recognized for quality, performance and innovation to meet the demands of powersports enthusiasts. Since 2000, Motorsport Aftermarket Group (MAG) has built a portfolio of the most desired brands in the motorsport parts and accessories aftermarket. No other industry participant owns as many dominant brands. Each MAG company is a leader in its market segments. The MAG companies enjoy long histories of leadership and innovation, some dating back to the 1960s. MAG’s businesses are operated worldwide and are focused on innovation, creative freedom and to be connected to their customers. Our teams also work together in product design and development, marketing and advertising, and special events to take advantage of our combined experience and resources. The MAG group office provides support in the areas of business development, finance, sourcing, information technology, sales, marketing and administration that is unmatched in the industry. For more information on MAG, visit www.maggroup.com.
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Debt for equity swaps might work if the business had and has great fundamentals and a bright future, and the bankruptcy was a result of a one time problem beyond its' control. I'm thinking the future in this case isn't all that bright for the core business, and you have to question how management allowed the situation to get this bad. The depressed state of the motorcycle business isn't breaking news, it's been that way since the early stages of the Great Recession. Wishful thinking that the good ol' days would soon return perhaps?
Jerry
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I have been in the short end of the stick on two restructuring deals by people I did work for. Neither came close to paying their debt to my company. Both companies ended up going out of business eventually. Sure would enjoy that money now in retirement.
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I have been in the short end of the stick on two restructuring deals by people I did work for. Neither came close to paying their debt to my company. Both companies ended up going out of business eventually. Sure would enjoy that money now in retirement.
Purpose of restructuring is exactly not to pay all your creditors what you owe them. In my job unfortunately we are on the receiving end of this often. There are signs it is coming but still unavoidable and "leaves a mark" for sure..
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https://ultimatemotorcycling.com/2017/11/16/mag-owner-multiple-motorsports-brands-files-chapter-11-300-mil-debt/