American Commercial Lines Inc. Reaches Agreement with Lenders on Prepackaged Plan to Recapitalize Business

JEFFERSONVILLE, Ind., Feb. 4, 2020 /PRNewswire/ -- American Commercial Lines Inc. (together with certain of its affiliates, "the Company" or "ACL") today announced that it has entered into a Restructuring Support Agreement (the "RSA") with holders of a substantial majority of its term loan lenders on a "pre-packaged" plan to recapitalize the business and significantly reduce the Company's debt. Under the terms of the RSA, ACL will receive $200 million in new capital to support liquidity and investments in the business. In addition, the RSA provides for a reduction of funded debt by approximately $1 billion.

To implement the RSA, the Company and certain related entities are currently in the process of soliciting approval of the "pre-packaged" plan and expect to file voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division (the "Court") in the coming days.  

The Company expects its operations to continue as normal throughout the contemplated court-supervised process. Upon emergence, ACL will continue to provide customers with competitive and reliable barge transportation services. 

Mark Knoy, President and Chief Executive Officer of American Commercial Lines, said, "ACL has built a decades-long industry leadership position through key investments in our fleet and a relentless focus on safe and reliable operations. Like many others in our industry, over the last four years ACL has been affected by challenging market conditions, the weather and the closure of key areas of the river system for extended periods of time. We have responded to these challenges by reducing costs and maintaining a high degree of financial discipline. The actions we are now taking will significantly reduce our outstanding debt and the associated costs to service that debt, freeing up our available resources to be fully devoted to competing in today's market."

Mr. Knoy continued, "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. We appreciate the support of our financial stakeholders, which we believe represents a statement of confidence in our business and enables us to move through this process on an expedited basis."

Mr. Knoy concluded, "We thank our customers for their continued support as we continue providing them the safest, most cost-effective and environmentally friendly barge transportation solutions. I would also like to thank our teammates for their continued hard work and focus on building on our industry leading safety performance."

In connection with the RSA and the expected Chapter 11 filing, ACL has received a commitment for debtor-in-possession ("DIP") financing consisting of a $640 million asset based loan ("ABL") and a $50 million term loan from certain of its existing lenders. Upon Court approval, the new financing and cash generated from the Company's ongoing operations will be used to pay off its existing ABL and to support the business during the court-supervised process.

The Company intends to seek to pay suppliers in full under normal terms for goods and services provided on or after the filing date. Under terms of the pre-packaged plan, which is subject to Court approval, general unsecured pre-petition claims will also be paid in full in the ordinary course.

Additional information is available at aclrecapitalization.com.

Milbank LLP is serving as the Company's legal counsel, Greenhill & Co. is serving as its financial advisor and Alvarez & Marsal North America, LLC. is serving as restructuring advisor.

Cautionary Note Regarding Forward-Looking Statements

Certain statements and information in this press release and certain oral statements made by our representatives from time to time may constitute "forward-looking statements." The words "propose," "believe," "expect," "anticipate," "plan," "intend," "foresee," "outlook," "estimate," "potential," "continues," "may," "will," "seek," "approximately," "predict," "anticipate," "should," "would," "could" or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. Forward-looking statements also include statements about our liquidity, our capital structure and expected results of operations. These forward-looking statements are based on ACL's current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that the future developments affecting us will be those that we anticipate. You are cautioned not to place undue reliance on forward-looking statements, which are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except as required by law.

Media
Michael Freitag / Aaron Palash / Kate Thompson
Joele Frank Wilkinson Brimmer Katcher
[email protected] 
(212) 355-4449

SOURCE American Commercial Lines Inc.