Advantage Rent-A-Car’s DIP facility lender, Catalyst Capital Group, won an auction for the company’s assets after submitting a revised offer under which, among other things, Catalyst agreed to waive the company’s existing defaults under the company’s DIP facility and agreed to continue lending to the company under a revised budget that the company said, “subject to certain limitations set forth on the record at the auction … significantly increases the debtor’s borrowing availability under the DIP Facility,” according to a court filing.
Catalyst is a Toronto, Canada-based private-equity firm focused on distressed situations.
As reported, Catalyst was the stalking-horse bidder for the company’s assets under which it agreed to credit bid the lesser of $46 million (the borrowing limit under the original DIP facility) or the amount of DIP obligations actually outstanding (see “Advantage DIP lender to act as stalking horse for asset sales,” LCD, Nov. 13, 2013).
As also reported, German car-rental company Sixt SE submitted the only competing qualified bid for the assets that, according to a court filing, was deemed to be a higher bid than the stalking-horse bid and was designated the so-called “auction baseline bid” (see “Advantage Rent-A-Car auction under way with opening bid from Sixt,” LCD, Dec. 9, 2013). The filing did not detail that bid, but according to the bidding procedures it would have included a $3.5 million overbid, determined by a $3 million break-up fee due to Catalyst and a $500,000 overbid requirement.
According to Catalyst’s revised asset-purchase agreement that the company said was the winning bid, the purchase consideration does not appear to have changed – it remains the lesser of $46 million or outstanding DIP obligations, plus the assumption of certain liabilities. But in a notice the company filed yesterday with the bankruptcy court overseeing its Chapter 11 case identifying the winning bid, the company said it deemed the revised Catalyst bid to be the “higher or otherwise better offer” after considering “all factors, including the amount of the purchase price, the likelihood of each bidder’s ability to close a transaction and the timing thereof, the form and substance of the purchase agreement requested by each bidder, and the net benefit to the debtor’s estate.”
A sale hearing for the assets of the company, identified in court filings as Simply Wheelz, LLC, is scheduled for Dec. 17 in Jackson, Miss. – Alan Zimmerman