Wheel Pros Prepares for Potential Bankruptcy Filing as Soon as Next Week

Reporting: Gaurav Sharma, Geoff Burrows, Harvard Zhang, Patrick Fitzgerald Wheel Pros is preparing for a potential chapter 11 filing as soon as next week after the wheelmaker and distributor missed an interest payment last month, according to sources. The first lien lenders are likely to equitize their holdings and obtain majority ownership of the company, the sources said. DIP financing is also being arranged, they added. Plans are not final, the sources cautioned, adding that a filing could be delayed or the company may opt for a transaction out of court. A chapter 11 filing would mark the first restructuring of a double-dip situation in which a liability management exercise is not able to solve the company’s financial woes and a more drastic restructuring is needed for the issuer. The missed coupon occurred on July 26 and the company subsequently entered into a forbearance agreement with lenders, according to sources. Wheel Pros benefited from increased spending by auto enthusiasts during the Covid-19 pandemic but consumer spending subsequently waned in an inflationary environment. Concerns about Wheel Pros’ liquidity resurfaced last month after management did not take questions during the most recent earnings call. The Clearlake Capital-backed wholesale distributor and manufacturer of[...]