Coach USA, the operator of Megabus and different commuter bus strains within the U.S. and Canada, filed for chapter safety in Delaware late Tuesday, in search of to promote its belongings and shed debt incurred in an ill-timed 2019 non-public fairness buyout.
Coach, the most important privately owned bus firm within the U.S., was acquired by non-public fairness agency Variant Fairness Advisors for $270 million US, principally utilizing debt that’s nonetheless on the corporate’s books.
The corporate is promoting the vast majority of its bus strains — together with Megabus Canada — to holding firm The Renco Group, in alternate for taking over $130 million US of firm debt and sure union contracts. Others can be offered to automotive rental service Avalon Transportation Inc.
“As soon as accomplished, these proposed transactions will protect 1000’s of jobs and guarantee uninterrupted passenger transportation companies to thousands and thousands of passengers all through the USA and Canada,” the corporate mentioned in an announcement.
CBC Information has reached out to The Renco Group for extra details about what this implies for Canadian travellers.
Buses will proceed to run as regular, says CEO
Coach shortly bumped into bother servicing its debt, because the COVID-19 pandemic brought on bus ridership to say no by 90 per cent from 2019 to 2020, in line with paperwork filed in a Wilmington, Del., chapter court docket.
Whereas ridership ranges have rebounded considerably for the reason that lows of 2020, they had been nonetheless solely 45 per cent of pre-pandemic ranges in 2023, and Coach has confronted larger rates of interest and elevated prices for primary wants like worker retention and gasoline, Coach mentioned in its court docket filings.
Coach CEO Derrick Waters mentioned that buses will proceed to run as regular throughout the firm’s chapter.
“Our prime precedence stays safely carrying the thousands and thousands of passengers who select our buses every year and dealing carefully with our valued contract prospects and transportation company companions,” Waters mentioned in an announcement.
Megabus is serving our passengers as regular and with out interruption at the moment, tomorrow, and past. As all the time, you may monitor schedules and e book tickets by means of the Megabus app and at <a href=”https://t.co/49cdpRWni9″>https://t.co/49cdpRWni9</a> and <a href=”https://t.co/l2mdeQu620″>https://t.co/l2mdeQu620</a>. <a href=”https://t.co/EXD4sSKDhG”>pic.twitter.com/EXD4sSKDhG</a>
—@megabus
Coach entered Chapter 11 with $197.8 million US in debt, together with $37 million US due on a pandemic reduction mortgage beneath the Coronavirus Support Reduction & Financial Safety (CARES) Act, and a minimum of $134 million US in different unpaid obligations, together with commerce money owed.
Coach USA operates in 27 places within the U.S. and Canada, with 2,700 staff and a pair of,070 buses. The corporate operates a number of different bus manufacturers along with Coach, together with Megabus, Dillon’s Bus Firm and Go Van Galder.
Coach entered chapter with three sale agreements in place, every of which is topic to larger and higher provides. These sale agreements cowl 16 of Coach’s 25 enterprise strains, and they’d protect jobs for about 2,100 Coach staff, in line with court docket paperwork.
