American Tire Distributors, Inc. (ATD) announced that the United States Bankruptcy Court for the District of Delaware has confirmed the company’s plan of reorganization. The company expects to complete its recapitalization and successfully emerge from Chapter 11 bankruptcy by the end of the year.
Upon emergence, ATD said it will reduce its debt by more than $1.1 billion and will receive new exit financing to ensure it will have financial flexibility to support its ongoing transformation and business transactions.
“We were able to reach this key milestone on an accelerated basis thanks to the confidence and support of our financial stakeholders, manufacturer partners and customers,” said Stuart Schuette, CEO of ATD. “Through this recapitalization process, we are creating a stronger ATD, with less debt and greater financial flexibility to build on our 80-year history of leadership and innovation. Importantly, we continued to deliver strong operating results throughout this process. Our performance reflects the deep value proposition that ATD continues to offer our customers and our manufacturer partners. We look forward to completing this process and remain laser-focused on providing our customers with the unparalleled selection and service they expect from ATD.
“I want to thank our team of more than 5,000 associates, who have maintained an unwavering focus on serving our customers and working with our manufacturer partners. Our associates continue to be the driving force that is enabling ATD to lead change in the industry. I also want to thank our customers, manufacturer partners and other business partners for their continued support and trust throughout this process.”
Under ATD’s reorganization plan, bondholders will receive 95% of new equity in the recapitalized company and existing equity holders will receive 5% of the new equity. The company said it intends to pay continuing manufacturer partners and vendors in full for existing claims after it emerges. It did not specify dates in which payments will be made. However, ATD has secured $1.2 billion in exit financing to ensure adequate liquidity, according to its reorganization plan filed with the courts in mid-November.
Additional information is available on ATD’s restructuring website at www.ATDrecapitalization.com or by calling ATD’s restructuring hotline, toll-free in the U.S., at 866-967-0495. For calls originating outside of the U.S., please dial +1-310-751-2695. Questions can also be submitted by email to [email protected]. Court filings and other documents related to the court-supervised proceedings are available on a separate website administered by ATD’s claims agent, KCC, at www.kccllc.net/ATD.
Kirkland & Ellis LLP is serving as legal counsel to ATD, AlixPartners LLP is serving as operational advisor and Moelis & Company LLC is serving as financial advisor.
This story will be updated.
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