As Trailer Bridge Inc. works to emerge from Chapter 11 bankruptcy, the company is putting its future in the hands of another marine-oriented public company.
Under Trailer Bridge’s Chapter 11 reorganization plan filed last weekend in U.S. Bankruptcy Court in Jacksonville, Fort Lauderdale-based Seacor Holdings Inc. will apparently control a majority of Trailer Bridge’s stock and have three seats on the company’s seven-member board of directors.
Bankruptcy court records do not specify how much stock Seacor will have, but the reorganization plan calls for holders of Trailer Bridge’s senior secured notes to be issued 91 percent of the company’s stock. Court filings do say that Seacor holds a majority of the notes, although they don’t indicate the exact amount.
Trailer Bridge, a Jacksonville-based marine and truck freight company, was forced into bankruptcy in November because it couldn’t repay those $82.5 million in notes. So its reorganization plan calls for noteholders to receive stock in partial payment.
Seacor spokeswoman Molly Hottinger said last week that the company had no comment on Trailer Bridge. But Trailer Bridge said in a news release that Seacor “intends to use its extensive maritime transportation experience to assist the company in implementing its strategy to return it to sustainable and profitable operations.”
Seacor is a company that provides equipment and services largely to support offshore oil and gas exploration. Its business lines also include a marine transportation segment that ships petroleum products and chemicals.
But the marine transportation unit is a relatively small part of Seacor’s operations, accounting for only 4 percent of its $1.6 billion in revenue in the first nine months of 2011.
Trailer Bridge transports freight between Jacksonville, Puerto Rico and the Dominican Republic.
It’s not farfetched to project Seacor eventually taking over Trailer Bridge completely. Seacor has a history of buying and selling assets and it filed last summer for an initial public offering for its helicopter subsidiary. That will raise cash to fund new investments, Credit-Suisse analyst Gregory Lewis said in a research report two weeks ago.
“Post the aviation IPO, we expect Seacor to hunt for opportunities in the marine space (of course Seacor is always on the prowl),” Lewis said.
“Seacor is an aggressive asset trader, always looking to manage its risk through the cycle,” Lewis said. He also said that “distressed acquisition opportunities” are the company’s “bread and butter.”
He also indicated that Seacor expects positive results from its acquisitions.
“Management does not like losses; therefore, we do not expect Seacor to hold onto businesses not generating their cost of capital,” he said.
Trailer Bridge is hoping to emerge from Chapter 11 by the end of March, but its plan still needs bankruptcy court approval. And the plan is facing opposition from some unsecured creditors, so the plan could be tweaked before confirmation. However it works out, it looks like Seacor will have a big say in Trailer Bridge’s fortunes.
CertusHoldings files for stock sale
The parent company of CertusBank N.A., which agreed in November to buy seven of the eight branches of First Guaranty Bank & Trust Co., filed a registration statement to sell shares of stock to the public.
But the filing last week with the Securities and Exchange Commission does not necessarily mean the company plans to go public.
CertusHoldings Inc. filed to sell 5.5 million shares of Class A stock and 5.7 million shares of Class B stock. These are shares that are already owned by the company’s original investors, so CertusHoldings is not raising any additional capital from the deal.
The SEC filing also says that there may not be a public trading market for the shares if they are sold. But the registration would allow the company’s original investors to cash out if they desire.
There are currently 98 Class A stockholders of record and 28 Class B stockholders, the filing said. It did not say who the stockholders are beyond the company’s executives.
CertusHoldings is headquartered in Atlanta and was originally called Blue Ridge Holdings Inc. but it recently changed its name to align with the name of its bank.
The company is run by a group of former executives of Bank of America and Wachovia Bank. They raised commitments for $500 million in capital in 2010 to invest in distressed banks and bought three failed banks in FDIC-assisted deals in 2011.
The acquisitions included Atlantic Southern Bank, which had one branch in Jacksonville.
CertusHoldings currently has 29 other branches in Georgia and South Carolina and wants to expand into a major Southeast regional banking company.
With that in mind, the company agreed in November to buy seven of First Guaranty’s eight branches to expand in the Jacksonville market. Other than noting that the acquisition is pending, the SEC filing does not give many details on the First Guaranty deal.
The filing does show that CertusHoldings’ strategy has been successful so far. The company, which has $1.8 billion in assets, recorded a net profit of $63.8 million in the first nine months of 2011 with a relatively low level of bad loans.
Of course, the advantage of acquiring banks in FDIC-assisted deals is that the government deposit insurance agency usually assumes the risk of bad loans left over from the failed banks.
The First Guaranty purchase is not an FDIC-assisted deal, but CertusHoldings said it is not acquiring any of First Guaranty’s “non-performing or other criticized loans.” It is acquiring more than $200 million in assets from First Guaranty, including $96 million in loans “that were reviewed and selected by our special assets group.”
PHH stock jumps on hedge fund investment
PHH Corp.’s stock jumped $1.42, or 13.3 percent, to $12.08 Wednesday after Hayman Investments and its managing member, J. Kyle Bass, said in an SEC filing that they had acquired 7.9 percent of the company’s stock. That was the fifth-biggest percentage
gain of all New York Stock Exchange-listed companies on Wednesday.
Investing website The Motley Fool explained why that investment was so significant for the stock:
“In short, Bass is a tack-sharp money manager who made oodles of money betting against the financial world ahead of the housing meltdown and financial crisis. And now he’s taken a position in mortgage company PHH? You better believe that’s interesting,” Motley Fool said.
New Jersey-based PHH says it is one of the top five mortgage originators in the U.S. Besides its headquarters in Mount Laurel, N.J., it also has a major mortgage operations office in Jacksonville.
Government looks at antitrust issues in Vulcan deal
In a strange twist, Vulcan Materials Co. said last week in an SEC filing that it is working to provide information requested by the U.S. Department of Justice in connection with a merger proposal from Martin Marietta Materials Inc.
The Justice Department apparently is concerned about antitrust issues arising from a possible merger of the two construction materials companies.
The strange part about it is that while Vulcan is working to provide the information, it doesn’t want the merger to happen. Vulcan has recommended that its shareholders reject the hostile takeover offer from Martin Marietta. So Vulcan is likely hoping that the Justice Department finds significant antitrust issues that would make it block the deal.