Stephen Letts, 28 January 2016

Troubled haulage company McAleese Transport has won a reprieve from its bankers in a bid to recapitalise the cash-strapped business.

Late last year McAleese warned that by the end of January it was likely to breach the financial undertakings it had made to its banking syndicate.

In a statement to the ASX, McAleese said it has received a waiver of a breach of financial undertakings from the banks.

“The waiver is subject to the continuation of the strategic process currently being undertaken and the company meeting reporting obligations to its financiers on the strategic process and each financier being satisfied with those reports,” McAleese said.

At the end of the 2015 financial year McAleese had total borrowings of $205 million on its books and $170 million in debt.

The company is reportedly working on an extensive recapitalisation plan which has attracted interest from offshore hedge funds and industry players.

McAleese has endured a troubled existence since listing on the ASX late in 2013, with its share price tumbling by 96 per cent over the past two years.

Its problems began with a fiery tanker crash in Sydney in early 2014 and questions being raised about the road-worthiness of its fleet.

McAleese subsequently lost key contracts with Caltex and Origin Energy and, more recently, its heavy haulage business has been hit by the resources slowdown and the winding down of major capital projects in the industry.

It also recently joined in with other contractors to support the ailing WA miner Atlas Iron with a debt for equity swap which left McAleese highly leveraged to the iron ore price.

An update on the recapitalisation plan is expected in coming weeks at the presentation of the company’s half-year results.

Extracted in full from ABC News.