FTAI Infrastructure Inc. (NASDAQ:FIP), a company specializing in railroad line-haul operations, disclosed today that one of its equity method investees, Long Ridge Energy & Power LLC, is seeking to refinance its existing loans with a new senior secured term loan. The plan was revealed in a recent 8-K filing with the Securities and Exchange Commission.
Long Ridge is aiming to refinance approximately $600 million of existing loans, terminate certain electricity sale derivative contracts, and enter into new ones. The proceeds from the new term loan will also cover various reserves and transaction fees. The subsidiary is targeting annual revenues of around $226 million and an Adjusted EBITDA of approximately $160 million after completing these transactions.
These financial targets are based on several assumptions, including continuous operation of Long Ridge’s power plant at about 90% capacity and the sale of electricity and gas at current market rates.
However, the company has noted that these targets are based on assumptions and that actual results could vary materially. Long Ridge has not provided forward-looking guidance for U.S. GAAP reported financial measures or a quantitative reconciliation of forward-looking non-GAAP financial measures due to the uncertainty of certain significant items.
In other recent news, FTAI Infrastructure reported a record adjusted EBITDA of $36.9 million for Q3 2024, a significant increase of 50% year-over-year. The company also announced a quarterly dividend of $0.03 per share. FTAI Infrastructure's total annual EBITDA is projected to reach approximately $220 million, with potential growth to over $300 million due to new business opportunities.
Key segments such as Transtar, Jefferson, Repauno, and Long Ridge are contributing to this growth, with new contracts and refinancing plans expected to enhance future cash flow. For instance, Jefferson's new contracts are expected to contribute an additional $20 million annually from 2025. In addition, Repauno's Phase 2 transloading contract is projected to add $60-70 million annually upon completion.
InvestingPro Insights
FTAI Infrastructure's recent disclosure about Long Ridge's refinancing plans aligns with several key financial metrics and insights from InvestingPro. The company's market cap stands at $963.42 million, reflecting its significant presence in the infrastructure sector. However, InvestingPro Tips highlight that FTAI Infrastructure "operates with a significant debt burden" and "may have trouble making interest payments on debt," which contextualizes the importance of the refinancing efforts at Long Ridge.
The company's revenue for the last twelve months as of Q3 2023 was $332.17 million, with a revenue growth of 7.01%. This growth, coupled with Long Ridge's targeted annual revenues of $226 million, suggests potential for improved financial performance. However, it's crucial to note that FTAI Infrastructure is "not profitable over the last twelve months," with an operating income margin of -6.28%.
InvestingPro Tips also indicate that the "stock price movements are quite volatile," which investors should consider in light of the refinancing news. Despite this, FTAI Infrastructure has shown a "high return over the last year," with a 1-year price total return of 134.29%, suggesting market optimism about the company's prospects.
For readers interested in a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide further insights into FTAI Infrastructure's financial health and market position.
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