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STG Logistics exits Chapter 11 bankruptcy protection
Ohio intermodal, drayage specialist cuts debt by more than $1 billion
STG reduced its funded debt obligations by more than $1 billion during the process. (STG Logistics)
Key Takeaways:
- STG Logistics exited Chapter 11 bankruptcy July 9 after filing Jan. 12 in New Jersey, with operations continuing throughout the restructuring process.
- The company reduced funded debt by more than $1 billion and eliminated about 91% of obligations through restructuring, supported by $150 million in DIP financing.
- STG is now majority owned by financial institutions led by Fortress, Fidelity and Invesco and plans to invest in operations, technology and capabilities, CEO Geoff Anderman said.
STG Logistics exited Chapter 11 bankruptcy protection July 9, the intermodal and drayage services provider said. Operations at STG continued as normal throughout the Chapter 11 process.
Dublin, Ohio-based STG and 64 affiliates filed for court protection Jan. 12 in the U.S. Bankruptcy Court for the District of New Jersey. On May 18, the bankruptcy court approved the company’s reorganization plan.
“The completion of this process marks a pivotal moment for STG, positioning us to invest in our people, our service, our technology and our capabilities,” STG CEO Geoff Anderman said. “We are grateful for the tireless efforts of our team, the continued loyalty of our customers and partners and the support of our financial stakeholders and advisers throughout this process.”
STG entered Chapter 11 proceedings to carry out a debt restructuring. The company reduced its funded debt obligations by more than $1 billion during the process.
While a number of carriers or their owners — such as Paladin Capital and Montgomery Transport — entered bankruptcy proceedings during the freight market downturn as a precursor to asset liquidation, historically, Chapter 11 has been a tool for indebted companies to reorganize their finances.
The company is now majority owned by a group of financial institutions led by funds managed by Fortress Investment Group, Fidelity Management & Research Co. and Invesco Senior Secured Management.
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STG was owned by Wind Point Partners, Duration Capital Partners and Oaktree Capital Management when it sought court protection.
The company received a final $25 million of $150 million in previously committed capital to support business operations now that it has exited bankruptcy protection.
In January, STG arranged $150 million of debtor-in-possession (DIP) financing from some existing lenders to allow it to reorganize its finances. DIP loans are intended to see a company through bankruptcy proceedings.
STG also signed a restructuring support agreement (RSA) with equity backers and lenders that held a majority of the carrier’s debt. The RSA eliminated around 91% of STG’s outstanding debt obligations.
