Lazydays Proceeds with Its Financial Restructuring

November 5, 2009 by Sherman Goldenberg 1 Comment

Lazydays RV Center Inc today (Nov. 5) announced that it has received the requisite approvals from its lenders and bondholders to move ahead with its previously announced debt-restructuring plan, which is expected to eliminate all of the company’s $137 million in bond debt, reducing its annual cash interest costs by approximately $16.2 million through the elimination of bond interest payments, a release states.

The Seffner, Fla., dealership’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.

In order to implement this “pre-packaged” restructuring plan, as previously stated, the company today filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Wilmington, Del. Because approvals have already been received from its lenders and the requisite percentages of the bondholders, Lazydays’ management expects to move through the court-supervised process quickly. “The prepackaged Chapter 11 is expected to be completed by the end of the year, with minimal disruption to the company’s business and without affecting services to the company’s customers,” the release notes.

“Lazydays will remain open for business as usual and will continue to serve customers in the normal course,” the release explains. “The company will maintain its same commitment to professionalism, customer service and quality. Customer benefits will remain unchanged.”

“We are very pleased to have received approval from our bondholders and lenders for our debt restructuring plan, which will put Lazydays on strong footing to take advantage of our industry leadership position as the economy recovers,” said John Horton, president and CEO. “We intend to move as expeditiously as possible to implement the plan, and we have taken the next step today by initiating the court-supervised process.”

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

Accordingly, the company has filed motions seeking authorization from the Court to continue to pay its suppliers under normal terms. Such approvals are routinely granted, Lazydays adds in its release.

“The company currently has adequate cash on hand to satisfy obligations associated with conducting business in the ordinary course,” the release explains. “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 floorplan agreement that will be effective on confirmation of the plan. The ad hoc committee of bondholders has agreed to invest $10,000,000 into the reorganized Lazydays.

“ 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 <http://www.betterlazydays.com/> .

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One Response to “Lazydays Proceeds with Its Financial Restructuring”

Ted Strickland on November 6th, 2009 7:56 pm

I think that Lazydays days are numbered. How do you just relieve yourself of 137 MILLION DOLLARS! of debt without having to sell the farm? Take a look at how Monaco fared with its chap 11. Lazydays is skipping over a lot of information. I bought a new rv in 2007. Lazydays NEVER finished with work that needed to be done to make the motorhome like it should be–new. I, for one, will be glad to see this turkey circle the drain. If you can’t keep up with those businesses that can handle the competition, you just need to go under and make way for those businesses that can make it. I bet there is a lot of resume rewriting done at Lazydays.