DALLAS -- The SH 130 Concession Company, a private consortium that operates and maintains the 41-mile southern section of State Highway 130 near Austin, has emerged from Chapter 11 bankruptcy with new ownership, new senior management and $260 million in new financing, the company said.
The financial reorganization has removed $1.4 billion in debt from the balance sheet of SH 130 Concession Company and will significantly improve the liquidity of the business, officials said.
The new ownership group — led by funds managed by global investment firm Strategic Value Partners, LLC or its affiliates — has hired Louis Berger Services to operate and maintain the roadway. Transportation industry veteran Andy Bailey is chief executive officer of the concession.
“SH 130 Concession Company has emerged from the Chapter 11 process as a much stronger company,” Bailey said. “Our capital structure has been transformed and the company’s new owners are committed to investing in the improvements, technology and people needed to enhance the driving experience for our existing customers and attract new drivers to the roadway.”
Bailey spent 25 years with the Virginia Department of Transportation before retiring as deputy commissioner in 2002. Bailey was responsible for highway design, construction, maintenance and operations for the third largest state transportation system in the United States. He went on to oversee major infrastructure rebuilding projects in Iraq for the U.S. Department of Defense and later for Louis Berger in Afghanistan and Sudan.
Mike Pillsbury is chief operating officer, with more than 40 years of experience in construction and engineering management in both the public and private sectors.
Harry Quarls, an experienced Texas-based infrastructure executive, will serve as the new chairman of the company’s board, joined by new board members Deirdre Delisi, Jordi Graells, Daniel Han, and Keith Min.
“SH 130 is a beautiful roadway that offers the fastest speed limit in the nation while also remaining incredibly safe,” Quarls said. “Our company is now positioned with the resources to succeed over the long-term.”
More than 7.68 million toll transactions were completed along the southern section of SH 130 in 2016, an 11% increase compared to 2015, according to the company. Truck traffic increased by 15% in the period.
SH 130 Concession Co. operates and maintains Segments 5 and 6 of SH 130 from Mustang Ridge to Seguin, Texas. The 41-mile section of the toll road immediately south of Austin offers a speed limit of 85 mph. The road is owned by the Texas Department of Transportation, which has leased the facility to SH 130 Concession Co. for 50 years.
The concession company was 65% owned by Spanish toll-road developer Cintra 35% by San Antonio-based Zachry Construction.
The company filed for Chapter 11 bankruptcy protection March 2, 2016 after traffic on the road east of Austin fell below projections. The tollway was expected to divert commercial traffic from the congested Interstate 35 that threads through the heart of Austin. However, truckers whose rigs had speed limits of their own found little economic incentive to use SH 130.
The road opened in October 2012 and began charging tolls in November 2012. For the first 2.5 years of operations, traffic and revenue ran substantially below the original forecast and are expected to remain weak given the aggressive ramp up and initial traffic forecast assumptions. Truck traffic levels have continued after the short term TxDOT discount ended on Nov.30, 2013, and car traffic has been above the revised budget forecast for the first quarter of 2015.
Moody’s Investors Service withdrew its ratings after lowering the debt to Ca from Caa3 when the bankruptcy was filed.