Trailer Bridge, Inc. (NASDAQ: TRBR) today announced that it has filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. The petition was filed in the U.S. Bankruptcy Court for the Middle District of Florida.
Trailer Bridge says its filing of Chapter 11 comes one day after its $82.5 million 9.25 percent Senior Secured Notes became due. It says it "believes that this action is the quickest and most efficient way to restructure its balance sheet and ensure the long-term strength of its operations. The company hopes to complete this reorganization by the end of the first quarter of 2012, and will work closely with its existing debt holders to emerge quickly from Chapter 11."
Subject to Bankruptcy Court approval, and with the help of its financial advisor Global Hunter Securities Trailer Bridge, has an agreement for $15 million in debtor-in-possession, or DIP, financing. Trailer Bridge says this financing will enable it to meet its post filing obligations in the ordinary course of business, maintain its sailing schedule and level of service and finance the costs associated with the Chapter 11 process. During the Chapter 11 case, Trailer Bridge, does not expect any significant or unusual reductions in overhead, and will continue its regular vessel deployment and sailing schedule.
Trailer Bridge provides multiple, weekly U.S. flag sailings between Jacksonville, Florida, and San Juan, Puerto Rico, weekly sailings between Jacksonville, Florida, and the Dominican Republic, as well as weekly inter-island service between Puerto Rico and the Dominican Republic.
William G. Gotimer, Jr. and Mark A. Tanner, the company's co-Chief Executive Officers, jointly stated, "While not an easy decision, we are confident that restructuring our business and capital structure will allow us to continue to provide reliable, uninterrupted service to our customers. Since the company was founded in 1991, our management team has felt that our system provides shippers with a completely integrated and cost-efficient method of connecting the US mainland with Puerto Rico and the Dominican Republic. With the average age of our vessel fleet of 16 years and use of 53-foot high-cube containers, Trailer Bridge offers the most modern ocean freight transportation system in the Caribbean. In recent weeks, we have seen significant volume increases in our southbound freight service and increased revenue. We believe that the efficiencies and service we offer shippers will become increasingly important to shippers in the coming months and years.
"We fully expect to meet the needs of our customers, our commitments to employees and our obligations to suppliers during this restructuring, and greatly appreciate their loyal support during this process. This plan, if successfully implemented, will result in a revitalized company with a vastly improved and deleveraged balance sheet."
November 16, 2011