Indiana toll-road operator files for bankruptcy

[dmcowen674]

9-23-2014

http://www.marketwatch.com/story/in...-bankruptcy-2014-09-22-11103225?siteid=yhoof2

Indiana toll-road operator files for bankruptcy



The debt-stricken operator of an Indiana Toll Road filed for bankruptcy protection Sunday with a plan to restructure some $6 billion in debt by selling its assets or reorganizing its business.


The company, controlled by units of Spanish infrastructure company Ferrovial SA http://www.marketwatch.com/investing/stock/fer?countrycode=es&mod=MW_story_quote and Australian investment bank Macquarie Group Ltd., said it will follow a two-track restructuring process.



Alternatively, senior creditors will swap their stakes for a 95.75% stake in a reorganized ITR Concession Co. Holdings LLC. The existing lenders have also agreed to lend $2.75 billion to the new company under the reorganization proposal.


The 157-mile toll road, which runs through Indiana between the Ohio Turnpike and Chicago Skyway, has struggled for years with a heavy debt load and lower-than-expected traffic. It missed an interest payment in June.

 

[dmcowen674]

They'll be a lot more of this coming.

The money is flowing out of the U.S. anyway since the road was allowed to be taken over by foreign countries.

The do nothing Congress passed a law in early summer this year allowing all Interstates in the U.S. to become Toll roads.

They are now putting up Tolls over the bridges that cross the Ohio river.

You will not be able to cross the river anywhere without paying a toll.

 

[Rakehellion]

They'll be a lot more of this coming.

The money is flowing out of the U.S. anyway since the road was allowed to be taken over by foreign countries.

The do nothing Congress passed a law in early summer this year allowing all Interstates in the U.S. to become Toll roads.

They are now putting up Tolls over the bridges that cross the Ohio river.

You will not be able to cross the river anywhere without paying a toll.

I don't understand. Toll roads are a good thing or a bad thing? You like the U.S. to have money but don't like paying businesses for their service.

 

[Genx87]

How bad does a company have to be run to not survive a govt gravy train contract?

 

[LegendKiller]

They'll be a lot more of this coming.

The money is flowing out of the U.S. anyway since the road was allowed to be taken over by foreign countries.

The do nothing Congress passed a law in early summer this year allowing all Interstates in the U.S. to become Toll roads.

They are now putting up Tolls over the bridges that cross the Ohio river.

You will not be able to cross the river anywhere without paying a toll.

The road wasn't "taken over" by foreign countries. Indiana got a sweet deal, they sold a concession to the Ferrovial and Macquarie that was *way* above the cashflow the road could support. How? Because the guy who built the models for traffic/tolls was way too optimistic. F/M didn't put much equity in the deal relative to the debt and they couldn't meet debt coverage as a result of revenues being well below the models.

The tolls existed before F/M bought it, Indiana just monetized it for a cashflow multiple far in excess of what they were realizing.

Also keep in mind that the banks aren't taking the road, they are taking control of the entity that has equity in the concession that Indiana originally sold. The concession is *far* different than owning the whole road. Indiana might even be able to take the road back if they don't like the bankruptcy or how the road is being managed.

 

[LegendKiller]

How bad does a company have to be run to not survive a govt gravy train contract?

When revenues run 40-50% below targets.

It was hardly a "gravy train" contract. The model was moronic, I know, I saw it.

Ask any truck driver what they do to avoid ITR tolls. F/M didn't think that would happen. Add into that the crisis which hit auto part distributors pretty heavily, many of which were located right on the ITR.

 

[cabri]

When tolls are to high, people will find an available alternate.

Tolls have to be cost effective to the people that use it (time & mileage).
Otherwise, toll operators price themselves out of the market.

 

[who?]

I don't believe the states would sell the roads if they could make money.

 

[chucky2]

Well two things really:

1. Doesn't help that the free I-80 is going in the same direction sorta, at least by Chicago.

2. IL has open road tolling (iPass), meaning, when going through the toll on the highway, you don't slow down or stop if you have the transponder, you just cruise right on through. Crazily, IN recognizes the IL iPass, however, they have it setup where you still have to come to a stop at the formerly manned gate. F*cking insanely stupid. So if you're a trucking company where time is money, and diesel is obviously money, do you use the free but possibly slower I-80 that lets you cruise unless it's choked up, or, do you use the toll road that is faster likely until you have to hit the toll, and then come to a stopping halt to then have to burn diesel accelerating again?

Fix the freaking toll booths and maybe more will use it!

Chuck

 

[Darwin333]

Anyone been on those crazy ass toll roads in Houston. The only time I have ever in my life had to pay to get on a road and pay to get off the fucker too. Seriously? Then they have stretches where you pay a toll, drive 5 or 6 miles and pay another toll on the same road. Just jack the damn first toll up and stop making me stop every few darn miles.

It wouldn't be so bad if I was a resident and had one of the ez passes but still, its absurd. The tolls, which are based per axle, are friggen absurd for trucks. Hell if I had brought my jetski it would have cost me at least another $40 or so. I generally don't bitch about such little things but damn. Truckers must carry a few hundred bucks, at least, in expense money just to make it a few dozen miles.

 

[Londo_Jowo]

Anyone been on those crazy ass toll roads in Houston. The only time I have ever in my life had to pay to get on a road and pay to get off the fucker too. Seriously? Then they have stretches where you pay a toll, drive 5 or 6 miles and pay another toll on the same road. Just jack the damn first toll up and stop making me stop every few darn miles.

It wouldn't be so bad if I was a resident and had one of the ez passes but still, its absurd. The tolls, which are based per axle, are friggen absurd for trucks. Hell if I had brought my jetski it would have cost me at least another $40 or so. I generally don't bitch about such little things but damn. Truckers must carry a few hundred bucks, at least, in expense money just to make it a few dozen miles.

Residents with EZTag get a discount at the tolls. The Toll Road is very well maintained using the monies collected.

 

[LegendKiller]

I don't believe the states would sell the roads if they could make money.

They can make plenty of money on them, they just can make more by leasing them.

 

[Meghan54]

The do nothing Congress passed a law in early summer this year allowing all Interstates in the U.S. to become Toll roads.

When did that happen? Link please.

 

[K1052]

When did that happen? Link please.

It didn't.

 

[Blackjack200]

Anyone been on those crazy ass toll roads in Houston. The only time I have ever in my life had to pay to get on a road and pay to get off the fucker too. Seriously? Then they have stretches where you pay a toll, drive 5 or 6 miles and pay another toll on the same road. Just jack the damn first toll up and stop making me stop every few darn miles.

The Garden State Parkway (NJ) is like this. Toll booths in each county except one (Union?) that granted the right of way on the condition that tolls not be collected on that stretch.

 

[CPA]

Anyone been on those crazy ass toll roads in Houston. The only time I have ever in my life had to pay to get on a road and pay to get off the fucker too. Seriously? Then they have stretches where you pay a toll, drive 5 or 6 miles and pay another toll on the same road. Just jack the damn first toll up and stop making me stop every few darn miles.

It wouldn't be so bad if I was a resident and had one of the ez passes but still, its absurd. The tolls, which are based per axle, are friggen absurd for trucks. Hell if I had brought my jetski it would have cost me at least another $40 or so. I generally don't bitch about such little things but damn. Truckers must carry a few hundred bucks, at least, in expense money just to make it a few dozen miles.

They do it that way so you don't have to pay $10 to go a mile. I have no issues with it and I live in Houston.

 

[brianmanahan]

I don't understand. Toll roads are a good thing or a bad thing? You like the U.S. to have money but don't like paying businesses for their service.

as a journalist of the highest order, dave simply reports the facts and lets the reader decide

 

[Londo_Jowo]

They do it that way so you don't have to pay $10 to go a mile. I have no issues with it and I live in Houston.

Exactly, this morning I got on the Sam Houston Parkway at 59 and got off close to Bush Intercontinental airport and it's a 35 mile trip. There were 3 tolls in that 35 miles that cost me $4.35, it would be $5.25 for people who do not have an EZTag pass. If the toll road was not maintained well I would complain but since I moved down here in 2008 I've seen them do a great job of maintaining and expanding the toll road.

 

[Pulsar]

It didn't.

Even more importantly, the bill was an Obama Administration creation. Dave Mcown's himself yet again.