American Tire Distributors said it has reached an agreement with 75 percent of its bondholders to reduce approximately $1.1 billion in debt, as the company voluntarily filed for Chapter 11 reorganization.
As part of the agreement, Huntsville, North Carolina-based American Tire Distributors (ATD) said it will receive $250 million in new financing – subject to court approval – to support its ongoing operations.
ATD said it “intends to pay suppliers and vendors in full under normal terms for goods and services provided on or after the Chapter 11 filing date.”
“Today we are announcing a positive, intentional and strategic next step as we move forward on a clear and expedited path to strengthen ATD’s financial position and continue our successful, game-changing transformation,” said Stuart Schuette, CEO of ATD. “We thank both our customers and manufacturer partners for the unwavering support that we have received over the last several weeks, which reflects our value proposition and our trusted relationships with them. As the industry continues to evolve, the actions we are taking will enable us to keep the power of choice alive for customers and continue serving them like no one else can.”
ATD has been rocked by recent changes in the tire-distribution industry. The biggest blow came from Goodyear Tire & Rubber Co., which earlier this year announced it is forming a joint-venture distribution network with Bridgestone Americas. In 2017, Goodyear accounted for around 12 percent of ATD’s sales, according to an article on the ATD website.
