Celadon Group Announces Update Concerning Refinancing Efforts and Bank Amendment

Company is reviewing and seeking an entire range of financial and strategic alternatives

Celadon Group, Inc. announced a company and refinancing update and that it has entered into a Seventeenth Amendment to its credit facility that is intended to provide continued liquidity through maturity.

Company and Refinancing Update

The Company’s current primary focus areas are executing its operational improvement plan and replacing its existing credit facility with a long-term capital structure.  The operational improvement plan is centered on refreshing the tractor fleet, disposing of real estate not used in trucking operations, and enhancing the operating discipline of its asset-based U.S. and cross-border truckload services. Management believes a long-term capital structure and the continued execution of its operational improvement plan will allow the Company to return to profitability over time.

To replace the existing credit facility, the Company is reviewing and seeking an entire range of financial and strategic alternatives with a goal of maximizing repayment of the credit facility obligations on a near-term basis (a “Repayment Transaction”).  Evercore has been engaged by the Company to lead the Repayment Transaction efforts. 

Chief Executive Officer, Paul Svindland, commented: “I am confident in our turnaround plan and our ability to execute it with a stable capital structure in place. We are speaking with multiple parties to negotiate a capital structure solution that most highly values our ongoing potential. We have already received support from tractor manufacturers and financing sources with new tractor deliveries underway and with an accelerated delivery schedule under a new capital structure.”

Seventeenth Amendment

On May 24, 2019, the Company entered into a Seventeenth Amendment to its credit facility.  The purpose of the amendment is to provide the Company with adequate liquidity through June 28 to allow an evaluation of Repayment Transaction proposals.   The amendment contains the following key terms:

• Maturity date remains June 28, 2019.
• Maximum outstanding amount of $122.7 million, including letter of credit sub-limit of $28.9 million and maximum borrowing of $93.8 million.
• A mandatory weekly cash budget through June 28. The budget and borrowing limit are designed to permit the Company to operate in the ordinary course of business.

The Company will provide additional information concerning the credit facility amendment on a Form 8-K to be filed with the United States Securities and Exchange Commission (the “SEC”).

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