MAG GROUP FILES FOR CHAPTER 11 PROTECTION WHILE NEW OWNERS RECAPITALIZE

According to the Global News Wire: Motorsport Aftermarket Group (“MAG”), a leading independent manufacturer and distributor of branded aftermarket products and online retailer for the powersports industry, announced it is implementing a comprehensive, consensual recapitalization to eliminate approximately $300 million in debt through a debt for equity exchange supported by in excess of 90 percent of the principal amount of the Company’s preppetition 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 accomplish over the past month, we will de-lever our balance sheet allowing us to more effectively compete in today’s evolving powersports market. MAG’s businesses will continue to operate unaffected and the Company has sufficient liquidity to fund operations. Customer service and sales will continue, employees will receive wages and benefits as before, and vendors and suppliers will be paid in the ordinary course of business going forward,” said CEO Andrew Graves.

To implement the recapitalization, 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 landscape and has implemented many initiatives to parallel today’s market. Unfortunately, the Company’s long-term debt continues to be an impediment to success,” added Graves. “As such, we believe 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 hopefully be a short bankruptcy case.”

KEY ELEMENTS OF THE RECAPITALIZATION:

(1) Employee wages and benefits will be paid in full in the ordinary course without interruption.

(2) Customer orders will be fulfilled consistent with past practice without delay or disruption.

(3) Vendors and suppliers will be paid timely and in full going forward.

(4) Company will emerge with new owners and a new board of directors.

MAG’s holdings include Renthal, Vance & Hines. Progressive Suspension, Answer, J&P, Pro Taper, Roland Sands, Malcolm Smith and others.

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