After more than a year in bankruptcy, the company operating the southern end of the Texas 130 tollway emerged Wednesday under new ownership and new management, shedding about $1.4 billion in debt in what its leadership said makes the nation’s fastest highway more stable.
Toll rates won’t be affected.
The 41-mile stretch of Texas 130 from Mustang Ridge to Interstate 10 near Seguin has a new majority owner. Strategic Value Partners LLC — a multinational investment group with offices in Connecticut, England, Germany and Japan — gobbled up 51 percent ownership of the company that runs Texas 130, according to tollway owner SH 130 Concession Company’s new CEO, Andy Bailey.
The remainder of the company is now owned by groups who owned the company’s debt, the largest being a 34 percent ownership stake by Build America Bureau, a government finance program and successor to a program that helped bankroll the tollway’s construction.
Strategic Value Partners is a firm with $5 billion in assets that specializes in investing in distressed assets.
The 85-mph tollway opened to fanfare in 2012 as having the fastest speed limit in the nation. But unlike the state-run stretch of Texas 130 from Mustang Ridge to Georgetown, the privately run southern portion has struggled with low traffic.
That made it difficult for SH 130 Concession to generate enough toll revenue to pay its debt, eventually causing the company to file for Chapter 11 bankruptcy in March 2016. During bankruptcy negotiations, that debt was essentially wiped out by converting some debt into ownership stakes for the new owners.
“Our capital structure has been transformed, and the company’s new owners are committed to investing in the improvements, technology and people needed to enhance the driving experience for our existing customers and attract new drivers to the roadway,” Bailey said Wednesday.
The previous owners, Spanish toll road builder Cintra and Zachry Construction Co. from San Antonio, now have no stake in the company running the toll road.
The Texas Department of Transportation owns the tollway but has leased it to SH 130 Concession in a 50-year lease that expires in 2062. The lease sets toll rates and the company’s payments to TxDOT, and those haven’t changed, SH 130 Concession spokeswoman Kate Miller Morton said.
SH 130 Concession does have $260 million in new debt after Goldman Sachs provided some financing.
Bailey, the new CEO, has overseen infrastructure projects for the Defense Department in Iraq and Afghanistan after 25 years with the Virginia Department of Transportation.
Morristown, N.J.-based Louis Berger Services will oversee operation and maintenance of the tollway.
The tollway raked in 7,685,871 toll transactions in 2016. In the first quarter of 2017, the tollway has seen 1,794,183 toll transactions, up about 2.6 percent from the first quarter of 2016.