ATU Auto-Teile: Restructuring agreement to reduce debt by €600 million

By Jim Witters

Wilmington, Del., Dec. 6 - ATU Auto-Teile-Unger Group has entered into a lockup and restructuring agreement that will reduce the company's debt by more than €600 million and recapitalize the company through a €100 million investment, according to a Dec. 5 company press release.

ATU also obtained a commitment from Hayfin Capital Management for a €75 million senior secured credit facility due in 2018.

ATU expects the implementation of the transaction to be completed during January 2014 pursuant to a voluntary solicitation of creditors, according to the release.

As part of the restructuring, the senior bondholders will convert their claims into preferred equity and about 5% of the common equity of ATU.

All senior bondholders will be invited to participate in the new investment, which will receive about 92% of ATU's common equity.

Funds managed by Centerbridge Partners, LP, Goldman Sachs Investment Partners and Babson Capital have committed to providing 100% of the investment on a proportional basis, according to the press release.

The transaction will reduce the company's cash interest cost by more than 90%.

At closing, the Centerbridge funds will become the majority shareholders of ATU.

"We are very pleased that all major stakeholders have come together to agree on a financial restructuring for ATU. Thanks to the support of the creditors involved and KKR (KKR & Co. LP), we have managed to achieve a significant debt reduction. Further, the new investment will dramatically strengthen the company's financial foundation and support ATU's growth," ATU chief executive officer Hans-Norbert Topp said in the release.

After the restructuring, ATU plans to "further advance and build the e-commerce, fleet management and car-glass growth businesses," the press release stated.

ATU, based in Weiden in der Oberpfalz, Germany, is the market leader in Germany for automotive service.

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