USA
Major inter-city coach operator Coach USA, which also owns megabus USA as well as operating a number of commuter networks in both the United States and Canada, has filed for bankruptcy protection in Delaware. Coach USA operates in 27 locations in North America, and employs around 2,700 people, operating and 2,070 buses. It also operates under several other brands, including Dillon’s Bus Company and Go Van Galder. The company is seeking to sell its assets and shed debt incurred in a 2019 private equity buyout.
Reported to be the largest privately-owned bus company in the United States, the company was acquired by private equity firm Variant Equity Advisors for $270 million, mostly using debt that is still on the company’s books and which it can no longer afford following a decline in ridership as a result of the Covid-19 pandemic.
Passenger numbers have risen since, but in 2023 were only around 45% of pre-pandemic levels, alongside business issues including higher interest rates and increased costs, the company says. CEO Derrick Waters said that the company’s services would continue to run normally during the company’s bankruptcy period. “Our top priority remains safely carrying the millions of passengers who choose our buses each year and working closely with our valued contract customers and transportation agency partners,” he said.
Records show that the company had debts of $197.8 million, including $37 million due for repayment as part of a pandemic relief loan, and at least $134 million in other unpaid debts.
The company has three sale agreements in place which cover 16 of its 25 business units and which would, if successful, preserve jobs for around 2,100 employees.
Private investment company Renco Group looked likely to acquire the majority of the firm’s assets in exchange for taking on $130 million of debt and some union contracts. Avalon Transportation looks likely to take over services in Atlanta, Georgia and a number of western states, as well as its specialist tour bus divisions, for $14.8 million. Meanwhile, ABC Buses is looking to buy 143 double-decker buses from the business for a total of $2.3 million.
The company said it is ‘continuing to pursue value-maximising going concern sales’ for its remaining business segments and assets that are not included in existing sale agreements, and that it is operating as normal and remains focused on operating safely and serving its customers.