RailWorks files for Chapter 11

By Peter Heap

New York, Sept. 21 - RailWorks Corp. said it and its U.S. operating subsidiaries made a voluntary filing for reorganization under Chapter 11 of the bankruptcy code in the U.S. Bankruptcy Court for the District of Maryland (Baltimore Division). The Baltimore, Md. company's Canadian operations are not affected.

RailWorks said it has obtained a commitment for up to $165 million of debtor in possession financing from members of its existing creditor group. The DIP financing is a revolver and letter of credit facility of up to $35 million, a term loan of up to $30 million and a surety bonding facility of up to $100 million supported by a letter of credit facility of up to $40 million. Lenders involved are Bank of America, N.A. as administrative agent, CSFB Global Opportunities Advisers, LLC, Stonehill Capital Management LLC, and Travelers Casualty and Surety Co. of America.

"With this capital infusion and bonding facility, every division of our company will be able to compete for new business, including bonded business," said chief executive officer of RailWorks, John Kennedy in a news release. "Through reorganization we believe RailWorks will emerge from bankruptcy stronger and continue to be a leading supplier of rail-related services and products."

The supplier of rail products and services also said Norman Carlson, formerly worldwide managing director of the transportation industry practice at Arthur Andersen, was named the new non-executive chairman of the board. Glass & Associates continues to serve as restructuring advisors. Law firms Willkie Farr & Gallagher and Whiteford, Taylor & Preston represent RailWorks Corporation in its chapter 11 filings. Dresdner Kleinwort Wasserstein, Inc. is investment banker and restructuring advisor.

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