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Lazydays Agrees to Financial Restructuring Terms

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September 4, 2009 by   Leave a Comment

Lazy Days RV Center Inc. today (Sept. 4) announced it has entered into an agreement in principle with its floorplan lenders and an ad hoc committee representing approximately 82% of its bondholders by value on a plan to restructure its debt.

If implemented as proposed, the restructuring plan will eliminate all of the company’s $137 million of debt (other than its ongoing floorplan credit facility), reducing its annual cash interest costs by approximately $16.2 million through the elimination of bond interest payments, according to a news release.

The company’s ongoing cash interest expense will be approximately $3 million incurred on its vehicle financing line, representing a reduction of 84% in annual cash interest expense from a total of $19.2 million prior to the restructuring.

“We believe the plan we are announcing today will help preserve and enhance our business for many years to come and are pleased to already have received support for this plan from a significant majority of our bondholders and our floor plan lenders,” said John Horton, president and CEO of the Seffner, Fla.-based RV dealership. “This debt restructuring plan will provide us with greater financial flexibility and more cash to invest in our business. It will allow us to continue to offer, uninterrupted, our customers the same great selection in RVs, the same high level of service, and the same unique experience they have come to expect. As the largest single-site recreational vehicle retailer in the world, we are in a strong position to withstand the turbulence in the market and to take full advantage of our leadership position as the market recovers.”

Support for the debt restructuring plan is currently being solicited by the company from its broader bondholder base. If approvals are received from the requisite percentages of the bondholders, as is expected, it is anticipated that the restructuring will be implemented through a so-called “prepackaged” Chapter 11 proceeding. A prepackaged Chapter 11 is designed to be completed promptly, within several months of filing, with minimal disruption to the company’s business and without affecting services to the Company’s customers. During the restructuring process, Lazydays will remain open for business as usual and will continue to serve customers in the normal course.

The company plans to move quickly through the reorganization process with its same commitment to professionalism, customer service and quality, Horton said. Customer benefits will remain unchanged.

Under the proposed plan, all suppliers will be paid in full — or “unimpaired.”

The company has adequate cash on hand to satisfy obligations associated with conducting business in the ordinary course. In addition, the company’s floorplan lenders, Bank of America and Key Bank, have agreed to provide interim funding through the company’s credit facility to support the acquisition of inventory during the restructuring period and have also consented to an amended floor plan agreement that will be effective on confirmation of the plan. The ad hoc committee of bondholders has agreed to invest $10 million into the reorganized Lazy Days.

The company’s legal adviser is Kirkland & Ellis LLP and its financial adviser is Macquarie Capital (USA) Inc. For more information on the restructuring, visit www.BetterLazydays.com.

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