STG Logistics enters Chapter 11 restructuring

STG Logistics Inc. has entered into a restructuring agreement with its equity sponsors and lenders aimed at significantly reducing its debt and strengthening its balance sheet amid a prolonged freight downturn.

The company said it has signed a restructuring support agreement with lenders holding a majority of its funded debt, which includes a commitment for up to $150 million in new capital from existing lenders. The move is intended to cut interest expenses, improve liquidity and position the company for long-term growth.

To implement the agreement, STG and certain affiliates have voluntarily initiated a prearranged, court-supervised reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey.

“Today’s announcement marks an important milestone in our efforts to strengthen STG amidst one of the most severe freight recessions in history,” said Geoff Anderman, CEO of STG Logistics. “We are confident that leveraging the chapter 11 process will best position the business for long-term growth and success. I am deeply grateful to our valued team, customers, vendors and other partners whose support enables us to continue delivering solutions for our customers at the highest levels while staying true to our core values of safety, service, integrity and efficiency at the forefront of our operations.”

STG said it will continue operating in the ordinary course of business during the restructuring process. The company has filed customary first-day motions to continue paying employee wages and benefits, maintain customer programs and meet obligations to key vendors, subject to court approval.

In addition to existing cash, STG plans to access up to $150 million in debtor-in-possession financing from current lenders to support operations during the Chapter 11 process.