US tire distributor ATD files for Chapter 11 protection

Huntersville, North Carolina – American Tire Distributors Inc. (ATD) has initiated voluntary Chapter 11 proceedings in the US Bankruptcy Court for the District of Delaware, the company announced 22 Oct.

With the move, ATD has entered into a restructuring support agreement (RSA) with lenders representing about 90% of the outstanding obligations under the company’s term loan

The ‘Ad Hoc Lender Group’ includes Guggenheim Partners LLC, Monarch Alternative Capital LP, Sculptor Capital Management Inc., and Silver Point Capital LP, according to the tire distributor.

ATD said it and the Ad Hoc Lender Group are discussing an asset purchase agreement that would transition ownership of the company to the lenders group, which manages more than $500 billion.

Such a deal, it stated, would “also eliminate a significant amount of debt and provide access to new capital, positioning the business as a stronger partner to manufacturers and customers.”

During the negotiation process, ATD “will continue to operate across its nationwide distribution network... and support its manufacturer partners and providing its customers with tires, wheels, related tools, and accessories.”

To ensure continued business operations, ATD said it has secured commitments for $250 million in new financing from the Ad Hoc Lender Group, as well as access to $1.2 billion in financing from lenders.

ATD is one of the largest independent suppliers of tires to the replacement tire market, operating more than 115 distribution centres serving around 80,000 customers across the US.