West Marine has restructured approximately $800 million of its existing debt in out-of-court proceedings with the assistance of its private-equity owner L Catterton, according to a report by SGB Media.
West Marine reportedly will receive $125 million in new funds from L Catterton, which acquired the retailer in 2021, plus a group of existing lenders. L Catterton will provide about two-thirds of the new funds and retain business control. Approximately $660 million of West Marine’s debt will convert into equity warrants as part of the deal.
The French conglomerate LVMH provides backing to L Catterton.
It has been reported that West Marine is struggling with supply chain challenges and reduced demand post-pandemic. In March, S&P Global Ratings upgraded the debt ratings of Rising Tide Holdings (doing business as West Marine) after it completed the exchange of its first- and second-lien term loan facilities.
In May, Moody’s Investors Service assigned first-time ratings to Rising Tide Holdings’ B3 corporate family rating and a B3-PD probability of default rating. Moody’s assigned a B2 rating to Rising Tide’s proposed $385 million first lien term loan and a Caa2 rating to the proposed second-lien term loan. Moody’s said its outlook for the company is stable.
Moody’s stated: “The stable outlook reflects the expectation that the recent margin enhancement will be sustained and deleveraging will occur through earnings growth while maintaining adequate liquidity.”
