Protecting a Lender's Recovery Through a Chapter 11 Change of Control
Areté served as financial advisor to the senior secured lender of a Tier 1 automotive wheel manufacturer, providing advisory support through a change of control effected via Chapter 11 and across the post-emergence stabilization process.
A Viable Business Under Mounting Cost Pressure
A Tier 1 supplier of the metal portion of car wheels for global OEMs, with operations in North America and Europe, was backed by a leading global investment firm that held the senior secured term loan across the consolidated enterprise.
North American EBITDA slid from ~$57M in 2021 to $33M in 2024 on roughly flat revenue ($372M to ~$359M) as COGS and overhead ballooned — a fundamentally viable business under mounting cost pressure.
An Independent View Before Emergence — and Stability After It
The senior secured lender engaged Areté roughly three weeks before emergence to deliver an independent strategic assessment, then retained the firm across two post-emergence workstreams.
Bankruptcy Advisory
Delivered an independent liquidity assessment in coordination with the debtor’s advisors, evaluated the proposed DIP plan, and recommended the optimal path forward — plus 503(b)(9) and administrative-claims reconciliation, flow-of-funds administration, and professional-fee management through emergence.
Liquidity
Built a 13-week cash-flow forecast and instituted a weekly cash-council discipline that restored working capital to a normal run rate through targeted vendor and customer negotiations.
Cost
Ran a rigorous labor and non-labor cost-reduction exercise across the go-forward business, addressing shared overhead tied to the wheel-end wind-down.
A Leaner Business on a Clean Balance Sheet
The lender adopted Areté’s recommendation, supported the plan of reorganization, and transitioned ownership of the North American entity. The restructuring eliminated over $400M in funded debt and restructured ~$170M in additional obligations, with the former senior lenders taking ownership under a reconstituted board.
After required AP paydown, working capital returned to a normal run rate, supporting stable operations and liquidity.
A cost-reduction roadmap addressed shared overhead tied to the wheel-end wind-down, protecting go-forward margin — ~$3M in annualized savings identified.
The company emerged leaner and North-American-centric on a clean balance sheet with new liquidity facilities, and has shown consistent liquidity and EBITDA strength since.