HCI Equity Partners may be looking to recapitalize Roadrunner Transportation

Move comes as Roadrunner looks to restructure. 

Roadrunner Transportation Systems may tap one of its largest shareholders for a new cash infusion to restructure its balance sheet. 

In a securities filing, HCI Equity Partners, which owns 20% of the company, says it entered a non-disclosure agreement with the carrier. The agreement is “regarding one or more potential transactions involving (HCI) in connection with (Roadrunner’s) previously announced evaluation of its financing alternatives.”

As Freightwaves previously reported, Roadrunner has engaged investment bank Barclays Capital to review financing alternatives to improve its long-term capital structure. 

The move to shore up the balance sheet comes soon after the company announced a $65.6 million net loss for the first half of 2018, versus a $57.8 million loss for the year earlier period. 

HCI Roadrunner’s balance sheet is weighed down by $513 million in debt and preferred stock. Interest payments and preferred share dividends alone were $43.7 million for the first half of 2018. 

Last year, Roadrunner secured a $292 million asset-based lending facility from major banks. Most of that was used to redeem $240 million in preferred shares issued to asset manager Elliott Management.    

Roadrunner chief executive Curtis Stoelting, who came onboard last year to help right the company, said on the last call there will be “bumps on the way” during the company’s ongoing turnaround, but “we remain committed to long term and lasting improvements in each of our segments and our consolidated bottom-line results.”

The Illinois-based company has been cleaning house since an accounting scandal forced it to restate its financial results form 2014 through 2017. Earlier this year, two executives were charged with conspiracy to commit securities and wire fraud.