Coach USA, the operator of Megabus and different commuter bus traces within the US and Canada, filed for chapter safety in Delaware late Tuesday, searching for to promote its belongings and shed debt incurred in an ill-timed 2019 personal fairness buyout.
Coach, the biggest privately owned bus firm within the US, was acquired by personal fairness agency Variant Fairness Advisors for $270 million, principally utilizing debt that’s nonetheless on the corporate’s books.
Coach shortly bumped into bother servicing its debt, because the COVID-19 pandemic brought about bus ridership to say no by 90% from 2019 to 2020, in response to paperwork filed in Wilmington, Delaware chapter courtroom.
Whereas ridership ranges have rebounded considerably because the lows of 2020, they have been nonetheless solely 45% of pre-pandemic ranges in 2023, and Coach has confronted larger rates of interest and elevated prices for primary wants like worker retention and gas, Coach stated in its courtroom filings.
Coach CEO Derrick Waters stated that buses will proceed to run as regular through the firm’s chapter.
“Our high precedence stays safely carrying the tens of millions of passengers who select our buses every year and dealing carefully with our valued contract clients and transportation company companions,” Waters stated in a press release.
Coach entered Chapter 11 with $197.8 million in debt, together with $37 million due on a pandemic aid mortgage beneath the Coronavirus Assist Reduction & Financial Safety (CARES) Act, and at the very least $134 million in different unpaid obligations, together with commerce money owed.
Coach USA operates in 27 places within the US and Canada, with 2,700 workers and a couple of,070 buses working. The corporate operates a number of different bus manufacturers along with Coach, together with Megabus, Dillon’s Bus Firm, and Go Van Galder.
Coach entered chapter with three sale agreements in place, every of which is topic to larger and higher affords. These sale agreements cowl 16 of Coach’s 25 enterprise traces, and they’d protect jobs for about 2,100 Coach workers, in response to courtroom paperwork.
Renco Group, a non-public funding firm, would purchase nearly all of Coach’s belongings in change for taking over $130 million of firm debt and sure union contracts. Avalon Transportation would purchase bus traces in Atlanta, Georgia and Western states, in addition to specialised tour bus divisions operated by Coach, for $14.8 million, and ABC Buses would purchase a fleet of 143 double-decker buses for $2.3 million, in response to courtroom paperwork.