Three prominent carriers announced yesterday that each is receiving new lines of credit – a sign lenders are willing to take a chance on the transportation industry as the U.S. economy recovers. U.S. Xpress Enterprises will receive $100 million in credit, The Bekins Co. has received a loan of $20 million and Trailer Bridge Inc. will get $4 million.
U.S. Xpress will get its five-year line of credit from Fleet Capital Corp. Proceeds from this new credit line will repay $45 million outstanding from the carrier's previous $87 million line of credit and replace $25 million in outstanding letters of credit, U.S. Xpress said.
U.S. Xpress lost over $1.1 million last year, despite increasing its operating revenues 1.4% to $798 million. The company reported net income of $2.1 million in 2000.
Patrick Quinn, co-chairman of U.S. Xpress, noted that the losses for 2001 resulted mostly from the startup and expansion in 2001 of a division within the carrier's CSI/Crown subsidiary that provides expedited airport-to-airport services.
Bekins' new round of credit is a two-year loan that provides availability based on The Bekins Company trade account receivables. Additional funds will be targeted toward growth opportunities and retirement of obligations.
"We are pleased that the loan agreement with Textron Financial has closed," said Bekins president & CEO Larry Marzullo. "This will further solidify our financial stability."
Multi-modal carrier Trailer Bridge said an affiliate has provided the loan, with an 8.03% fixed interest rate, no principal payments for two years and quarterly interest payments in arrears. The loan will be secured by the same collateral backing up a similar $3 million loan made in January of this year.
In another deal, Kadampanattu Corp., another affiliate, has agreed to allow Trailer Bridge to defer payment on certain amounts due under the charter of the two roll-on/roll-off vessels, through at least the end of 2002.
In the third quarter of 2001, Trailer Bridge's revenue fell to $20 million and losses rose to $4.8 million. At the end of last year, Trailer Bridge said it had negative working capital of $16.1 million.