Keystone Automotive 2013 noteholders agree to swap debt for equity

By Caroline Salls

Pittsburgh, Jan. 11 - Keystone Automotive Operations, Inc. has reached an agreement with affiliates of Platinum Equity, LLC and Littlejohn & Co., LLC on the terms of a recapitalization transaction that is expected to reduce Keystone's outstanding debt and enhance its ability to compete in the aftermarket auto parts industry, according to a company news release.

The Platinum and Littlejohn affiliates hold more than 64% of Keystone's senior subordinated notes due 2013.

Once completed, the recapitalization would reduce Keystone's and its parent company's outstanding debt by roughly $295 million.

"We are very pleased to have reached agreement with the majority holders on the terms of a recapitalization that will reduce debt, strengthen our balance sheet and better position us for future growth opportunities and long-term success," Keystone president and chief executive officer Ed Orzetti said in the release.

Under the transaction, Keystone's existing $175 million of senior subordinated notes would be converted into new equity.

In addition, the majority holders have agreed to backstop a $60 million rights offering, and Bank of America, NA has committed to provide a new asset-based revolving credit facility.

Keystone said Goldman Sachs Lending Partners LLC has been engaged to arrange a new $120 million first-lien senior secured term loan.

The proceeds of the rights offering, the new ABL loan and the new term loan, in addition to cash on hand, would be used to repay the company's existing ABL revolving credit facility and senior secured term loan facility.

All trade suppliers will continue to be paid in full for all goods and services provided, the release said.

Upon closing, Keystone said it is projected to have at least $55 million of total liquidity.

As of Jan. 1, the company had about $44 million in cash on hand to support its business operations.

The recapitalization is expected to be completed in the first half of 2011.

Kirkland & Ellis LLP, Miller Buckfire & Co., LLP and FTI Consulting, Inc. are serving as legal advisers, investment bankers and financial advisers, respectively, to Keystone.

Keystone is an Exeter, Pa., distributor and marketer of specialty automotive accessories.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.