TNT Crane is working with advisors to craft a global refinancing plan that entails consolidating its capital structure, said three sources familiar with the matter. Under the plan, the company aims to add two key unrestricted subsidiaries – Allison Crane & Rigging and Rocky Mountain Structures (RMS) – into the asset group with the legacy TNT business, they said.
The company is working with a cadre of four advisors on its strategic and financial alternatives effort, including Stifel, Goldman Sachs, Macquarie and RBC, the sources said.
The group is reaching out to direct lenders and PE sponsors for a potential equity injection or direct lending transaction, two of the sources said. Management and First Reserve have USD 70m and USD 230m of invested capital in TNT, respectively, a third source added.
TNT is pitching the strategy on the back of earnings momentum in 2019. Management recently provided lenders a snapshot of its preliminary consolidated full-year performance, highlighting year-over-year revenue growth of 7.5%, to USD 488m, for 2019, and an EBITDA gain of 7% to USD 127m, the sources said.
Furthermore, the company had NOLs of USD 210m as of year-end 2018m, which management believes it can maintain to offset cash taxes, two of the sources said.
Meanwhile, 2019 EBITDA margins were slightly weaker at 25.4%, from 26.2% the previous year, credited to higher demand and increased use of re-rented cranes.
As of 31 December, consolidated total leverage stands at 7.3x, based on USD 923m of total debt and USD 127.2m of adjusted EBITDA.
In December, TNT pushed out its revolver maturity to August 2020 from January 2020, as reported. The USD 442.3m first lien term loan comes due in November 2020, followed by its USD 185m second lien term loan due November 2021. The company also struggled to ink a deal with an Apollo-backed SPAC last year.
The first lien TL is last quoted in the 88.425/90.65 context, down from 89/91 last week, according to Markit. The second lien is quoted 59/63.375, compared to quotes in the 60/64 context last week.
Goldman Sachs declined to comment. Macquarie declined to comment. First Reserve, TNT, Stifel and RBC did not respond to requests for comment.