Struggling Consolidated Freightways secures $45 million for turnaround plan

VANCOUVER, Wash. (Feb. 25, 2002) — Consolidated Freightways Corp. said it has secured $45 million (all figures U.S. dollars) in loans to help fund a turnaround program.

The financing is secured by the company’s real estate assets. Consolidated also said GE Capital, a unit of General Electric Co., had converted a six-month bridge loan to a $42 million facility with a 24-month term. The GE facility will also be backed by company real estate.

Consolidated Freightways specializes in less-than-truckload freight. Its operating divisions include Canadian Freightways and third-party logistics provider Redwood Systems.

“Consolidated Freightways, like the rest of the LTL industry, was impacted by the national economic slowdown in 2001 and especially by the September 11 tragedies, which significantly reduced overall demand for freight transportation services,” chief executive officer Pat Blake said in a statement.

“In addition, we faced increased customer concern about our position in the marketplace as we moved forward with the turnaround process. Those factors continued as the fourth quarter began with a tough October.”

The company said it lost $37.5 million in the fourth quarter ended Dec. 31, bringing its net loss for 2001 to $104.3 million. In 2000, the company lost of $6 million for the fourth quarter and $7.6 million for the full year. Revenues for the full year 2001 were $2.2 billion versus $2.4 billion in 2000.

Total tonnage declined 9.3% for the quarter compared to last year and 3.6% for the year 2001.