Leading North American Marine Container Terminals

Background

Zolfo Cooper has assisted three of the largest marine container terminal operators in North America, with combined revenue of over $1 billion. As a result of a cyclical downturn and significant leverage, each of the companies was facing a breach of financial covenants on its senior secured facilities, which ranged from $800 million to $1.9 billion.

Concurrent with lender negotiations, each company was also evaluating major initiatives, including acquiring a significant new concession lease at a high-volume location, a strategic terminal expansion project and the operational restructuring of a key location.

The Projects

In each assignment, the first in June 2008, Zolfo Cooper was engaged to advise lenders about potential restructuring options, specifically:

  • Performing due diligence on various aspects of each of the companies, including: strategic and operational business plans, cost-benefit analysis of major initiatives, and assessment of cash flows.

  • Advising the respective lender groups on the current and short term liquidity needs and the potential structure of credit agreements of each of the marine container terminal operators.

  • Managing and structuring a complex transaction among 20+ international lenders and the domestic equity sponsor that would meet the requirements of various state government entities, all within critical, time-compressed deadlines.

  • Leading difficult communications among 30+ member international bank group, equity sponsors and company management Identifying and addressing key cross-border and international restructuring issues.

Outcome

Zolfo Cooper successfully negotiated an amendment to a marine container terminal operator’s credit agreement, which materially increased its value, including an additional $100 million outside investment for facility expansion and early debt repayment; a new lease agreement to improve EBITDA, and a successful raising of $250 million capital for the new concession acquisition.

For another marine container terminal operator, Zolfo Cooper negotiated a restructuring in which the senior debt and the interest rate swap holders would receive a 100% return of principal, compared to less than 40% without a restructuring.