Celadon Reaches New Credit Deal With Lenders

Celadon Group Inc. said it has struck an amended credit agreement with lenders led by Bank of America Corp., giving the debt-laden trucking company breathing room to pursue a broader refinancing plan to boost liquidity.

The Indianapolis-based trucker, one of the largest in the U.S. specializing in long-haul freight transport, said in a statement that it expects to defer release of financial results this year until an audit of transactions involving equipment purchases is completed.

Celadon said in May that it expected to post a $10 million operating loss for the quarter ending March 31, 2017, and that financial statements covering more than a year of its financial operations couldn't be relied on, after its auditor withdrew its reports for those periods. Celadon hired Stephens Inc., an investment bank and private-equity firm, as an adviser and launched a review by the company's audit committee.

The company also could also face a pretax $62.4 million noncash impairment charge as the result of its annual review of intangible assets, according to the statement.

Representatives for Celadon and Bank of America didn't immediately to respond to requests for comment.

Shares in Celadon, which peaked at $26.75 a share in March 2015, closed down 5 cents, or 1.6%, at $3.10 a share in trading Monday.

Celadon Chief Executive Paul Will said in the new notice that key operating metrics such as revenue per truck per day were "trending upward" and that "by focusing on the right business mix, the right capital structure, and the right operating principles, we will establish a sustainable and successful path forward for Celadon."

Celadon's financial troubles follow a sizable bet the company made on its truck-leasing arm, an investment that appears to have soured as used-truck values fell. The company has attributed the expected $10 million operating loss to tepid demand in the carrier's truckload sector.

In recent months, the company's finances have been under scrutiny over a joint venture that closed in December involving its leasing division.

Celadon has been negotiating with lenders over a new $225 million asset-based revolving credit facility that the company at one point said was expected to close by June 30.

The term sheet for the proposed new credit facility "remains under consideration, though the size, collateral and terms" could differ, the company said.

The amendment to Celadon's existing agreement with the banks bumps its credit limit up by about $26 million, from $200 million, according to the statement. It also pushes off testing of certain loan covenants until Sept. 30.

Write to Jennifer Smith at jennifer.smith@wsj.com

(END) Dow Jones Newswires

July 03, 2017 16:06 ET (20:06 GMT)