Cycle News is a weekly magazine that covers all aspects of motorcycling including Supercross, Motocross and MotoGP as well as new motorcycles
Issue link: https://magazine.cyclenews.com/i/904678
IN THE WIND P30 MOTORSPORT AFTERMARKET GROUP (MAG) FILES CHAPTER 11 M otorsport Aftermarket Group, also know as MAG, one of the largest owners of aftermarket powersport brands (such as Renthal and Answer) in the industry, announced that it is filing for Chapter 11. Statement from the company: Motorsport Aftermarket Group ("Company" or "MAG"), a leading independent manufacturer and distributor of branded aftermar- ket products and online retailer for the powersports industry, announced it is implementing a comprehensive, consensual recapitalization to eliminate ap- proximately $300 million in debt through a debt for equity ex- change supported by in excess of 90 percent of the principal amount of the Company's prepe- tition 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 ac- complish over the past month, we will de-lever our balance sheet allowing us to more effec- tively compete in today's evolving powersports market. MAG's busi- nesses will continue to operate unaffected and the Company has sufficient liquidity to fund op- erations. Customer service and sales will continue, employees will receive wages and benefits as before, and vendors and sup- pliers will be paid in the ordinary course of business going for- ward," said CEO Andrew Graves. To implement the recapitaliza- tion, 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 land- scape and has implemented many initiatives to parallel today's market. Unfortunately, the Com- pany's long-term debt continues to be an impediment to success," added Graves. "As such, we be- lieve 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 hope- fully be a short bankruptcy case." Key Elements of the Recapitalization: - Employee wages and ben- efits will be paid in full in the ordinary course without inter- ruption. - Customer orders will be fulfilled consistent with past practice without delay or disrup- tion. - 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 Con- trarian Partners will lead the new owners group, and have deep experience in consumer products and lifestyle companies including distribution, retail and manufac- turing. "We are encouraged to have access to the resources the new owners bring, by their pas- sion for the powersports industry, and for their shared vision for MAG's future. Looking forward, MAG will be able to more aggres- sively capitalize on market and growth opportunities given our strong balance sheet post recapi- talization," said Graves. "Importantly, MAG is very ap- preciative of its employees who