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Lazydays Pursues Aggressive Restructuring Plan
Posted By RVBusiness On September 4, 2009 @ 1:16 pm In Breaking News | No Comments
John Horton, CEO of Lazydays RV Center Inc. in Seffner, Fla., told the St. Petersburg Times he hopes to expedite the company through bankruptcy by December.
The company has struck a deal with bondholders to eliminate all of its $137 million debt through a pre-packaged Chapter 11 bankruptcy reorganization.
With its sprawling 126-acre complex in Seffner, Fla., Lazydays is the largest single-site RV center in the nation. It’s also at the heart of an industry that’s been shedding jobs and cutting costs rapidly as it struggles through a severe recession.
A committee representing Lazydays’ floorplan lenders and an ad hoc committee representing 82% of its bondholders agreed to the restructuring, the company said today (Sept. 4), but it must present the plan to all bondholders.
If approved, it will cut the RV dealer’s annual cash interest costs by about $16.2 million.
“What it means for us long term is we’re going to emerge with a very strong balance sheet and I think a great opportunity to gain even more market share and be a real dominant force in the industry as we go forward,” Horton said in the interview.
The RV industry has been hard-hit the past couple of years by the dual punch of higher gas prices and consumers reluctant to spend on big-ticket, leisure-oriented items. At the same time, banks have tightened financing for luxury purchases like recreational vehicles and boats.
As a result, RV sales nationally have fallen dramatically, cut in half in some markets. Some of the biggest RV manufacturers in the country have filed for bankruptcy reorganization.
In November, Lazydays opted not to pay an $8.1 million debt payment that was due to bondholders, negotiating since then to cut its debt and stay in business. Its work force was cut from 750 to less than 500.
Ricky Gunn, a 16-year sales veteran at Lazydays who was laid off nine months ago, said one of the biggest problems is the tightening of bank financing. Bank deals for 115% financing used to be available; now it’s 85%.
Horton declined to discuss current revenues but called recent sales “encouraging.”
“I think people understand the economy and (have) a little bit better outlook,” he said, “and are feeling confident about making a purchase on something they really love.”
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