America’s Car-Mart in sale talks as debt pressures mount - Bloomberg

Investing.com -- Americas Car-Mart Inc (NASDAQ: CRMT) and its senior lenders are actively working toward a potential sale of the business as the used-car dealer and subprime auto lender struggles to navigate a severe liquidity crunch and mounting debt pressures. Discussions are centered around executing a deal either through a court-supervised Chapter 11 bankruptcy process or via a traditional shareholder vote, according to people familiar with the matter cited by Bloomberg.

The ongoing sale negotiations mark the latest effort by the Rogers, Arkansas-based retailer to stave off a catastrophic collapse following months of severe operational headwinds. The company had previously been exploring multiple strategic alternatives, including securing rescue financing and offloading select separate assets, after acute liquidity constraints pushed it to the verge of default.

Central to the ongoing restructuring discussions is the proposed treatment of the company’s outstanding asset-backed securitization trusts, which are expected to remain untouched in a transaction, according to people familiar with the situation. Market data compiled by Bloomberg indicates that these securitization trusts are currently quoted around 98 cents on the dollar, signaling that the underlying loan portfolios remain over-collateralized with asset values exceeding the principal balance.

The current crisis escalated rapidly in June when America’s Car-Mart defaulted on a $300 million term loan from Silver Point Capital, which had been drawn down to repay its primary asset-backed line of credit. Since the default, the retailer has been operating under a series of short-dated forbearance extensions while attempting to finalize a long-term restructuring framework with its creditors.

According to a regulatory filing on Thursday, lenders recently granted the company another weeklong reprieve through Oct. 22 to finalize negotiations. The persistent uncertainty has severely eroded market capitalization, sending America's Car-Mart shares down 16% in Tuesday trade and leaving the stock down more than 99% from its all-time high.

Original Article

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