Bridger $47m tank car sale

Bridger Rail Shipping has sold 1,072 rail cars, including 300 model DOT-117 and 772 model CPC-1232 rail cars. Most of the CPC-1232s are currently in storage and incurring storage fees, while all the DOT-117s are currently leased to a third party under a multi-year contract.

The sale is to an undisclosed buyer for $47m. Proceeds from the transaction will be used to reduce outstanding debt on the company’s secured credit facility. 

Bridger Rail Shipping is a subsidiary of Bridger Logistics, a holding company for various subsidiaries that continue to do business in terminals and storage, trucking and transportation, and salt water disposal. Bridger Logistics was also the holding company that owned Bridger Energy, which its parent company, Ferrellgas Partners, sold on January 16, 2018. 

“This transaction is another clear example of Ferrellgas’ commitment to debt reduction,” said James E. Ferrell, Interim Chief Executive Officer and President. “The sale significantly reduces our interest expense, improves our credit metrics, and lessens the company’s reliance on its credit facility as we move forward with growth efforts. We expect that the credit benefits from the sale of these assets will be achieved without impacting our forecasted EBITDA.”

With the sale, the company’s debt will be reduced with the proceeds resulting in a proforma expected reduction in interest expense of approximately $2.8m per year. In the fiscal second quarter ending January 31, 2018, the company expects to report a non-cash loss on its model CPC-1232 rail cars of approximately $35m. No gain or loss is expected from the sale of the model DOT-117 railcars.

“The market for our rail cars has changed in recent years,” continued Ferrell, “so we have made the strategic decision to exit the rail car business. With the sale, our streamlined company has further reduced its business risk profile, with the result being that our prospects for cash flow growth are strong. We have positive momentum and our employees are keenly focused on providing our customers with the world class service we’ve always been known for.”

Ferrellgas Partners serves propane customers in all 50 states, the District of Columbia, and Puerto Rico, and provides midstream services to major energy companies in the United States.

For more information visit www.bridgergroup.com

5th Mar 2018