News and Analysis
Hoonigan advances restructuring talks and mulls possible prepackaged deal
- Rachel Butt
•1 min read
Hoonigan has allowed its forbearance to lapse as it advances talks with its lenders, according to 9fin sources.
The aftermarket auto parts company, formerly known as Wheel Pros, is attempting to draw up a potential prepackaged bankruptcy framework, sources said.
Hoonigan has been evaluating options that include out-of-court restructuring, as well as DIP financing needs for a possible bankruptcy. The DIP would allow existing revolver lenders to roll into the facility, sources said.
Discussions are ongoing and remain fluid, and an out-of-court deal could still be possible. Quotes on the company's more than $1.1bn loan due 2028 are at 58 cents, while the senior notes due 2029 are at 1.75 cents.
Backed by Clearlake Capital, Hoonigan got forbearance after skipping interest payments tied to its first lien term loans. The custom wheels maker has significantly undershot its earnings forecast due to inventory de-stocking, a higher cost environment and changes in working capital, as reported.
The company likely ended Q1 24 with roughly $61m of liquidity, and its high interest burden will lead to a significant cash burn this year, according to S&P’s downgrade on 9 August.
Houlihan Lokey has been advising Hoonigan, as reported. Last year, the firm represented Hoonigan in a liability management deal that entailed a double-dip structure.
Representatives at Hoonigan and Houlihan didn’t respond to requests for comment. Clearlake declined to comment.
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