Sunday, January 19, 2020

ACBL and its finances

The Wall Street Journal's website had an article Thursday evening about how the investment group that owns American Commercial Barge Line (ACBL) is having some problems.

The M/V D&R Boney, a boat AEP sold to ACBL in 2015.

The article itself is behind a paywall. For the time being, I have an online subscription, so I was able to read the short article. As a matter of professional principle (I'm all for people being paid for what they write), I don't copy and paste material that's behind paywalls. However, I will summarize it and add a few thoughts of my own.

According to the article, ACBL needs to restructure its debt, which amounts to more than $1 billion. ACBL has been owned by Platinum Equity LLC, which bought it in 2010 for about $770 million. In recent months or years, ACBL has had problems in its business of moving dry goods.

My own observations: Remember October 1, 2015, when AEP announced it had sold most of its marine transportation unit to ACBL for about $550 million? AEP kept 12 boats, but it sold the majority of its marine unit to ACBL. The next day, I had a list of the boats AEP was keeping, and it was the most viewed post in the history of this blog, and still is.

ACBL has sold off some of the boats it bought from AEP, but apparently not enough to help pay down the debt significantly.

ACBL might be able to restructure its loans to terms that are more favorable, or it might make a short trip to bankruptcy court to accomplish that. One thing I have no knowledge of is the extent of contracts ACBL has with whatever unions represent its workers, and I don't know if those contracts would be in danger. The same with whatever health insurance, retirement or other benefit plans ACBL has for its union and nonunion work force.

I do know that ACBL is not nearly as active on this part of the Ohio River (Huntington, West Virginia, around Mile 308) that it was a decade ago, but you can say that about other companies, too. I assume Campbell Transportation is doing some of the work for ACBL up here, based on what its executives told me a few years ago, but that information might be out of date by now.

When it sold its marine operations to ACBL, AEP was wanting to get out of the contract hauling business and concentrate on its core business of selling electricity. AEP still generates most of its own electricity, but it wants out of that business segment in deregulated states such as Ohio where it is not guaranteed a certain rate of profitability.

So that's all I know. If anyone has any more information from the inside, I'd be glad to hear it.