Inversiones Alsacia S.A. Executes Concession Agreement Amendments And Extends Expiration Of Its Consent Solicitation.
SANTIAGO, Chile, Aug. 29, 2013 /PRNewswire/ -- Inversiones Alsacia S.A. ("Alsacia" or the "Company") and Express de Santiago Uno S.A. ("Express" and, together with Alsacia, the "Concessionaires") announced today that they executed amendments to their Concession Agreements (the "Concession Amendments") with the Chilean Ministry of Transportation and Telecommunications ("Ministry"). Alsacia expects that the Concession Amendments will significantly benefit the Concessionaires when they become fully effective, which is expected to occur no later than the 4th quarter of 2013, once they are formally approved by the General Comptroller of the Republic of Chile.
Alsacia also announced today that it is extending the Expiration Time for its currently pending consent solicitation of holders of its 8% Senior Secured Notes due 2018. The prior Expiration Time of 5:00 P.M., New York time, on Tuesday, September 3, 2013 has been extended until 5:00 P.M., New York time, on Thursday, September 12, 2013. The extension will give Notes holders sufficient time to consider the Concession Amendments.
As a result of the Concession Amendments, the Concessionaires will receive an increase in the Pago por Pasajero Transportado (Payment per Passenger, or "PPT") of Ch$22.0 for Alsacia and Ch$19.6 for Express, an approximately 4% increase over current levels.
The Concessionaires will start collecting the main portion of the PPT increase beginning when the Concessionaires put 92 new buses into operations, which is expected to occur by November 2013. The Concessionaires expect that the additional buses will also allow them to operate more efficiently and service more passengers, which they believe will generate additional annualized revenues. The Company expects that the combined effects of these changes on its earnings before interest, income taxes, depreciation and amortization will be approximately U.S. $4.5 million per year, based on current passenger traffic and operating conditions, after adjustment for expected operating improvements and costs relating to the new buses. In addition, upon effectiveness of the Concession Amendments, the Company will receive a one-time payment of approximately U.S. $2 million relating to a portion of the PPT increase which is retroactively effective beginning on December 14, 2012.
The Concession Amendments will also reduce the level of discounts applied to the Concessionaires' revenues related to performance indicators required under the Concession Agreements. The Concessionaires believe that the lower discounts will result in estimated annualized net revenue increase of approximately U.S. $4.5 million.
In aggregate, the Concessionaires believe that the impact of the Concession Amendments will increase their annualized recurring earnings before interest expense, taxes, depreciation and amortization by approximately U.S. $ 9.0 million, after giving effect to the expected lease expense of the additional buses and assuming no other unexpected increases in operating costs.
According to Mr. Ruben Alvarado, Alsacia and Express´s Chief Executive Officer, "the Concession Amendments are a positive step in improving both the cash flow position of Alsacia and Express and, through the additional buses, improving the service level fulfillment ratios established under the Concession Agreements. We are pleased to have reached an agreement with the Ministry of Transportation and Telecommunication, which reflects their ongoing support towards strengthening our operation."
Alsacia is providing additional information about the Concession Amendments to its bondholders through a supplement to its pending Consent Solicitation Statement, to be delivered to bondholders on Monday, September 2nd.
ABOUT ALSACIA
Alsacia, together with its affiliate, Express de Santiago Uno S.A. ("Express"), are collectively the largest operator in the Transantiago Transportation System, transporting approximately 800,000 passengers every day, throughout 35 communities in Santiago, which accounts for more than 30% of the passengers in Transantiago. Alsacia and Express belong to an international holding company with interests in public passenger transportation, environmental solutions, outsourcing services and real estate development in Chile, Colombia, Panama, Peru and the United States of America.
This press release contains words, such as "believe," "intend," "estimate," "expect," "could," "may," "will," "plan," "target," "project," "potential," "predict," "forecast," "guideline," "should," "anticipate" and similar expressions, that identify forward-looking statements reflecting our views about future events and financial performance. Words such as "believe," "could," "may," "will," "anticipate," "plan," "expect," "intend," "target," "estimate," "project," "potential," "predict," "forecast," "guideline," "should" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying these statements. Statements that are not historical facts, including statements about our strategy, plans, objectives, assumptions, prospects, beliefs and expectations, are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve inherent risks and uncertainties. These forward-looking statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Actual results could differ materially and adversely from those expressed or implied by the forward-looking statements as a result of factors that may be beyond our control, including but not limited to:
- our ability to service our debt, fund our working capital requirements or comply with financial covenants in our debt instruments;
- our ability to fund and implement our capital expenditure programs;
- our ability to successfully complete acquisitions and disposals; partnerships, existing or future; and our ability to realize expected synergies or cost savings;
- our ability to comply with the terms of our concession agreements and related agreements;
- changes in our regulatory environment, including transportation and environmental regulations;
- the maintenance of our relationship with the Chilean Ministry of Transportation;
- the maintenance of our relationships with our employees;
- passenger validations and seasonality;
- fluctuation of fuel prices;
- the state of the Chilean and world economies;
- the relative value of the Chilean peso compared to other currencies;
- the effects of inflation;
- the effects from competition; and
- the effects of changes in interest rates.
SOURCE Inversiones Alsacia S.A.
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