Dealership group Holiday RV Superstores Inc. has received an additional financial commitment from Affinity Group Inc. Chairman Steve Adams in order to payoff its senior inventory finance loan, according to Marcus Lemonis, chairman and CEO.
As of last Wednesday (Nov. 13), Holiday RV, which operates six dealerships in six states, had inventory valued at $23.3 million, while the balance it owned on its floorplan loans was $14.3 million.
Bank of America (BofA) is Holiday RV’s senior lender even though the loan agreement between Holiday RV and BofA expired on Oct. 31. As of last Wednesday, Holiday RV owned $11.8 million to BofA.
However, Holiday RV announced today (Nov. 18) that Adams, who owns more than 50% to Holiday RV’s common stock, will acquire BofA’s loan on or before Dec. 12. Consequently, BofA agreed not to exercise its right to demand a full repayment from Holiday RV at least until Dec. 13.
“We are pleased to announce that we have accomplished an essential component of our operational and financial restructuring,” Lemonis said. “I feel that with continued deleveraging of the balance sheet and the completion of this recapitalization, we have a fresh start with a new company, a new balance sheet and an opportunity to focus on profitability and growing our company.
“Our near term goals include organic growth in existing operations, strategic acquisitions and co-location ventures,” Lemonis continued. “This recapitalization also allows our company to pursue our long-term strategy of growing revenues while focusing on driving margins.”
Holiday RV will not need to reduce its inventory as a result of the deleveraging, Lemonis added. The dealership group will operate according to an inventory “turn and earn system” with the target of a “90 to 100 day supply” of product in mind, he said.
AGI is the parent of TL Enterprises Inc., publisher of RV Business and RVBUSINESS.COM.
Adams invested in Holiday RV as an individual and Adams is not an executive of Holiday RV nor is he a member of its Board of Directors.