After engaging with more than a dozen potential lenders, Bouchard Transportation has secured $60m in debtor-in-possession financing.
The loan, which will inject the troubled ATB owner with much-needed liquidity as it pursues bankruptcy protection in US courts, comes from Hartree Partners and immediately provides Bouchard Transportation with $28.8m.
"I understand that this funding need is acute and that [Bouchard Transportation needs] access to financing imminently to ensure their ongoing viability while pursuing an operational turnaround," Jefferies managing director Richard Monger said in court papers.
He said the money would help cover the millions in unpaid bills Bouchard Transportation has to trade creditors, plus fund capital and operating expenditures, including getting its fleet recertified and trading again.
Jefferies was retained by Bouchard Transportation to assist in the restructuring.
The company made the request on Wednesday and was approved by US Bankruptcy Judge David Jones of the Southern District of Texas on Thursday.
Bouchard Transportation declared bankruptcy in late September, capping off a tumultuous three-year period for the storied Long Island company.
It started in 2017 with an explosion aboard one of its barges in Texas, which killed two seafarers. The incident prompted its classification society, the American Bureau of Shipping, to recommend the US Coast Guard revoke critical safety documents.
Without the safety documents, its ships were unable to trade, leading to a liquidity crunch, an avalanche of lawsuits over unpaid bills and a three-year run in which the company posted its first-ever losses.
It attempted to retain DNV GL to get its ships reclassified, but the Norwegian class society backed out after a safety audit.
When Bouchard Transportation declared bankruptcy, Monger said, the company had just $170,000 left in cash.
The company has said the bankruptcy declaration was necessary to provide it breathing room to restructure, as its creditors had secured judicial sales for two tugs and two barges.
He said the company discussed debtor in possession financing with as many as 18 potential lenders, receiving term sheets from two.
The loan is backed by four of Bouchard Transportation's 25 barges and five of its 26 tugs. It matures in a year, with a six month extension at Hartree's discretion.
It can draw the remainder of the $60m — $31.2m — after Hartree approves a business plan and budget and Bouchard Transportation's ships begin trading again.
The company already has $229.5m in long-term debt, including $164.1m in loans from Wells Fargo secured by 11 barges and 8 tugs.
The remainder is made up of $40.4m in loans from the Bouchard family, which runs the company, and a $25m loan secured by the company Gulfstream GV1.
