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SH 130 Concession Emerges from Bankruptcy Under New Ownership

07/17/2017 12:17:00 pm | Viewed: 112

Texas Construction News from Virtual Builders Exchange


The State Highway 130 toll road from Seguin to Georgetown emerged from bankruptcy under new ownership.


Posted: 7-17-2017, 12:45 p.m.

by Adolfo Pesquera

Austin (Travis County) - SH 130 Concession Company LLC, the private firm that controls a 41-mile toll section of Highway 130, is under new management with new financing, according to a June 28 company statement.

Cintra and Zachry American Infrastructure, the team that developed and managed the toll road,  entered bankruptcy in 2015. They have been replaced by an ownership group led by Strategic Value Partners LLC, a distressed and deep valueinvestment firm. Louis Berger Services will operate and maintain the SH 130 toll section between Seguin and Georgetown.

The ownership change was approved in late June by the bankruptcy court. This case was administered by U.S. Bankruptcy Judge Tony Davis of the Western District of Texas Austin Division.

The restructuring announcement followed an earlier statement by SH 130 Concession Co. that on May 18 the court confirmed a Modified Seconed Amended Joint Plan of Reorganization, which cleared the way for emergence from bankruptcy with new equity partners.

The Plan of Reorganization provides for a restructuring of the Company's balance sheet, as well as distributions of cash, new indebtedness, and equity to various classes of creditors and stakeholders. Additionally, SH 130 received court approval to enter into a new fully committed $260 million senior secured term debt facility led by Goldman Sachs at the effective date, explained SH 130 CEO Alfonso Orol.

The $260 million will provide SH 130 Concession Co. with working capital to repay some lenders.

Orol was replaced, subsequent to the May 18 court confirmation, by Andy Bailey. Bailey spent 25 years with the Virginia Department of Transportation before retiring as Deputy Commissioner, the highest career level position in the department, in 2002. As Deputy Commissioner, he was responsible for highway design, construction, maintenance and operations for the third largest state transportation system in the United States. He went on to oversee major infrastructure rebuilding projects in Iraq for the U.S. Department of Defense and later for Louis Berger in Afghanistan and Sudan.

Under the terms of the new facility, SH 130 emerges with a more conservative leverage profile and increased financial flexibility.

In a statement to Engineering News-Record, Bailey said that, “As the company emerged from bankruptcy … the institutions that had that initial debt, some had sold their interest to others, some remained in, but essentially that original debt that was on the books was wiped out."

The reorganization removed the $1.4 billion debt incurred by Cintra and Zachry American Infrastructure from the firm’s balance sheet and significantly improves its liquidity, Bailey added.

The toll road was built and based its projected revenues prior to the 2008-2010 recession. Lower than expected revenues forced the Chapter 11 filing. However, SH 130 Concession notes that transactions in 2016 were up 11 percent over 2015 and truck traffic increased 15 percent.

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Adolfo Pesquera

Adolfo Pesquera is a veteran news journalist. He has worked for Hearst Corp., American Lawyer Media, News Corp and Freedom Communications. His work has been published in newspapers and magazines across the USA. He is a journalism graduate of UT-RGV. He writes, edits and creates digital pages for VBX.