American Commercial Lines, an Indiana-based dry bulk operator, has announced that it has agreed with its lenders to file for chapter 11.
The company has entered into a restructuring support agreement with holders of a substantial majority of its term loan lenders on a pre-packaged plan to recapitalise the business and significantly reduce the company’s debt.
Under the agreement, the company will receive $200m in new capital to support liquidity and investments in the business as well as a reduction of funded debt by approximately $1bn.
The company is now in the process of soliciting approval of the plan, and expect to file voluntary petitions for reorganisation under Chapter 11 in the Southern District of Texas, Houston Division of the US Bankruptcy Court.
According to Mark Knoy, president and CEO of American Commercial Lines, the company has been affected by challenging market conditions, weather and the closure of key areas of the river system for extended periods of time in the past four years.
“With this plan, we will have more liquidity to support our operations through economic cycles and weather patterns and additional financial flexibility for fleet management. In addition, we will be able to focus more of our resources on investing in the business to support future growth,” Knoy said.
American Commercial Lines transports dry bulk, liquid and project cargos throughout the inland waterways of the US with a large barge fleet and a terminal network.