Forging a New Path: Superior Industries to be Acquired by Lenders in Innovative Debt Restructuring Scheme

In an unprecedented move within corporate debt restructuring, Superior Industries International Inc. has announced that it is strategically reorganizing its balance sheet. The company plans to do this by allowing itself to be acquired by a new entity, controlled by its own loan lenders. This bold strategy may pave the way for other companies in similar financial predicaments, offering a fresh and innovative approach to balancing corporate finances.

This drastic debt-restructuring move was agreed upon by all of Superior’s term loan lenders. In addition, around 40% of Superior’s shareholders have ratified their approval of the transaction. At the root of this financial maneuver is a novel recapitalization support agreement (RSA), that underpins the acquisition.

A pivotal part of the agreement is that the term loan holders will convert almost $550 million of their term loan debt into a 96.5% stake in the new entity. Additionally, Superior’s current facilities will either remain unchanged or be refinanced.

The end game for Superior is to significantly reduce their existing obligations, cutting their debt from $982 million to approximately $125 million. The company foresees this transaction closing in the third quarter of 2025. Meanwhile, Superior’s President and CEO, Majdi Abulaban, expressed his gratitude to the lenders for stepping in to support the firm’s continued operations.

Despite the company’s recent challenges with ratings agencies, including downgrades due to customer losses, Superior remains steadfast and optimistic. Notably, this audacious approach to debt restructuring promises to set a new precedent, offering a fresh paradigm and financial lifeline to struggling companies.