December 2, 2004
Trailer Bridge completes K. Corp acquisition
Trailer Bridge, Inc. (NASDAQ: TRBR) yesterday completed what chairman and CEO John D. McCown called "outstanding, transforming events."
The effect is that the company's fixed cash expenses have decreased by approximately $5 million per year and $2 million in annual preferred stock dividends have been eliminated.
Trailer Bridge, founded by the late Malcom McLean the inventor of containerization, provides intermodal service from the mainland U.S. to Puert Rico using four giant barges able to carry 53 ft containers.
Yesterday, Trailer Bridge closed its offering of $85 million in aggregate principal amount of 9.25% senior secured notes, which mature in 2011. The notes are secured by a first priority lien on two roll-on, roll-off vessels, 53 ft intermodal equipment and real estate.
Trailer Bridge utilized net proceeds of approximately $81.5 million to fund the purchase price for all of the outstanding stock of Kadampanattu Corp. ("K. Corp.") and to retire certain indebtedness of K. Corp. In addition, a portion of the proceeds were used to retire certain indebtedness of Trailer Bridge, to acquire certain containers and chassis that were previously leased to the company and utilized in its operations and for working capital. K. Corp. previously owned and leased to Trailer Bridge two triple-deck roll-on, roll-off barges for $7.3 million per year and held $24 million of Trailer Bridge preferred stock that has been cancelled.
John D. McCown, Chairman & CEO, stated, "The acquisition of these assets and the related financing are outstanding, transforming events for Trailer Bridge. The net effect is that our fixed cash expenses have decreased by approximately $5 million per year and $2 million in annual preferred stock dividends have been eliminated. We are pleased to be closing on these accretive transactions at the same time that our operations are continuing to benefit from improving sector supply/demand dynamics."