During this process STG reduced its funded debt obligations by more than $1 billion. (STG Logistics)
key takeaways:
- STG Logistics emerged from Chapter 11 bankruptcy on July 9 after filing on January 12 in New Jersey, and continued operations during the reorganization process.
- The company reduced funded debt by more than $1 billion and eliminated approximately 91% of its obligations through a restructuring supported by $150 million in DIP financing.
- CEO Geoff Anderman said STG is now owned by financial institutions led by Fortress, Fidelity and Invesco and plans to invest in operations, technology and capabilities.
The intermodal and drayage service provider said STG Logistics exited Chapter 11 bankruptcy protection on July 9. Operations at STG continued as normal throughout the Chapter 11 process.
Dublin, Ohio-based STG and 64 affiliates filed for court protection on Jan. 12 in the U.S. Bankruptcy Court for the District of New Jersey. On May 18, the bankruptcy court approved the company’s restructuring plan.
“The completion of this process is a significant moment for STG, as we prepare to further invest in our people, our service, our technology and our capabilities,” said Geoff Anderman, CEO of STG. “We are grateful for the tireless efforts of our team during this process, the continued loyalty of our customers and partners, and the support of our financial stakeholders and advisors.”
STG entered Chapter 11 proceedings to restructure the debt. The company reduced its funded debt obligations by more than $1 billion during the process.
While many carriers or their owners – such as Paladin Capital and Montgomery Transport – entered bankruptcy proceedings during freight market downturns as a precursor to asset liquidation, historically, Chapter 11 has been a tool for indebted companies to reorganize their finances.
The company is now owned by a group of financial institutions led by Fortress Investment Group, Fidelity Management & Research Company and funds managed by Invesco Senior Secured Management.
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When STG sought court protection it was owned by Wind Point Partners, Duration Capital Partners and Oaktree Capital Management.
The company received the 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 debtor-in-possession (DIP) financing of $150 million from some existing lenders to allow it to restructure its finances. The purpose of a DIP loan is to help a company undergo bankruptcy proceedings.
STG also signed a restructuring support agreement (RSA) with the equity backers and lenders that held the majority of the carrier’s debt. The RSA extinguished approximately 91% of STG’s outstanding debt obligations.
