Rand Logistics, Inc. (NASDAQ: RLOG) shares fell Friday, following an even-more serious declined from Wednesday, following a deal to be purchased by American Industrial Partners (AIP)
The deal, announced Tuesday of this week, involved AIP, a New York-based private equity firm with over $4 billion of assets under management that focuses on buying, improving and growing industrial businesses in the U.S. and Canada, converting all of RLOG’s second lien debt into 100% of the new common equity of the reorganized Company.
The transaction will materially de-lever Rand Logistics’ balance sheet, eliminating approximately $90 million in outstanding debt and will also dramatically reduce annual interest expense. As a result of the AIP transaction, which will be effectuated through a pre-packaged plan of reorganization, Rand will enjoy its strongest financial position in recent years.
Rand, based in Jersey City, is a provider of bulk freight shipping services throughout the Great Lakes Region. Through its subsidiaries, the Company operates a fleet of three conventional bulk carriers and twelve self-unloading bulk carriers including three tug/barge units.
Rand CEO Edward Levy said, "We are pleased that we have reached an agreement, which will allow Rand to significantly reduce its debt burden and partner with a leading private equity firm."
Levy added, "The transaction firmly addresses Rand’s recent balance sheet challenges and positions the Company for continued customer service and growth."
Still, what may constitute happy tidings for Rand is not necessarily so for potential stock buyers; the shares took a header on Wednesday, the day after the deal, and did not improve on Friday, falling 5.7%, or 15.6%, to 31 cents by noon hour EST.
Related Stories
