The Motorsport Aftermarket Group (MAG) announced that it has successfully concluded its Chapter 11 proceedings, after the bankruptcy court accepted the company’s plan for reorganization and debt recapitalization.
As a result of the bankruptcy process, MAG is under new ownership, with creditors Monomoy Capital Partners, BlueMountain Capital, and Contrarian Partners now in control of the massive motorcycle parts, apparel, and commerce conglomerate.
For those who don’t recall, MAG entered Chapter 11 back in November 2017, with the debts of the company spreading out through the group’s many owned brands.
“I am proud of our team and enthusiastic about MAG’s future,” said Andy Graves, President and CEO of MAG, in a press release.
“The restructuring process was not without its challenges; our team is grateful for the support, patience, and continued commitment of our employees, suppliers and customers.”
To wipe its debt, MAG underwent what is called a debt-for-equity swap, where the creditors of MAG’s debt exchanged the money they were owed for shares (equity) in MAG’s ownership stock.
$300 million of MAG’s $440 million debt was restructured in this manner, which is a significant reduction for the company. MAG reported to the bankruptcy courts that it grossed $175 million in 2017, though only took home $20 million that year.
With its gross earnings now on par with its outstanding liabilities, MAG should be better equipped to operate its house of brands. What remains to be seen now is whether MAG can find new legs and growth in this economy, and with this ownership group.
It also remains to be seen whether Monomoy Capital Partners, BlueMountain Capital and Contrarian Partners will stay on as MAG owners, or sell their shares to outfits who are more accustomed to the powersports industry.
Source: MAG
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