Laurinburg & Southern Railroad

When the fourth generation owners of the Laurinburg & Southern Railroad were ready to retire, they called on SRF to handle their affairs.

Laurinburg & Southern Railroad's Challenge

In May of 1998, the Evans family faced the imminent expiration of $5.5 million in tax credits. SRF was engaged to finance a part of the client's solution−the reopening of a vegetable oil processing plant. The railroad and the plant were two elements of a complex set of assets that included the railroad, 6,000 acres of farm and timberland, 130 railcars, and 19 locomotives.

Project

Save $5.5 million Net Loss Carry Forward Tax Credit due to expire in 90 days.

Results of Strategic Rail Finance's Work

We implemented a unique alternative strategy, coordinating negotiations with existing creditors and advising on the sale of the railroad. Some of the accomplishments were:

• Added $1,000,000 to sale price of railroad by clarifying undervalued rail assets
• Saved $1,600,000 in a satisfactory settlement with existing creditors
• Averted $5,000,000 in new debt, previously considered unavoidable
• Saved $5,500,000 in tax credits through the creation of a breakthrough financial and business strategy within 24 days of start of engagement just in time to utilize recently enacted STB fast-tracking of smaller railroad transactions