Bus manufacturer Motor Coach Industries (MCI) is stable and “well prepared” with sufficient cash following its recent emergence from bankruptcy which saw the company reorganized with a new majority stockholder, according to President and CEO Tom Sorrells.
National Bus Trader magazine reported that the No. 1 manufacturer of buses in the U.S. emerged from Chapter 11 bankruptcy in April.
“The completion of our financial restructuring is a major milestone in the 76-year- history of MCI,” Sorrells said. “I am particularly pleased that, given a very challenging economic backdrop and tight credit markets, we were able to complete the process in just seven months.”.
MCI, with headquarters in Schaumburg, Ill, is a leading manufacturer of intercity coaches. MCI bus shells also are converted into high-end Class A motorhomes.
An investment fund managed by Franklin Mutual Advisers LLC has become the company’s majority shareholder through the conversion of third-lien secured debt into common stock and the issuance of $200 million in preferred stock, according to the magazine.
The company was at one time owned by Greyhound Corp., and most of MCI’s $420 million in debt that was wiped out in the pre-negotiated bankruptcy was accumulated in a spinoff from Dial Corp., which acquired MCI from Greyhound in the mid-1990s. Because bus sales were on the increase, debt payments were taken from operating revenue until MCI’s bankruptcy.
MCI emerged from bankruptcy with $230 million in financing through $75 million in revolving credit arranged by GE Capital and $155 million in a second-lien loan through a group of lenders.
”We have secured a strong new financing package … to enhance the company’s post-emergence capital structure,” Sorrells said. ”With a strengthened financial base, we are well positioned to take greater advantage of the market opportunity and further grow our business.”
Even as overall bus sales declined while MCI Was in bankruptcy, a few days after emerging from bankruptcy, MCI was reported to have increased its market share to 60.2% of the bus market, according to National Bus Trader.