An affiliate of the Spanish contractor set to build toll lanes on Interstate 77 north of Charlotte has filed for bankruptcy over a similar toll road project it operates in Indiana.
The company expects its trip through bankruptcy court to be swift: The operator of the Indiana Toll Road, which paid $3.8 billion for a 75-year operating lease, won approval of a schedule paving the way to exit bankruptcy court protection in just more than a month.
U.S. Bankruptcy Judge Pamela Hollis in Chicago on Tuesday granted ITR Concession Co.’s request to set an Oct. 28 hearing on its restructuring plan. ITR filed for bankruptcy Sunday, saying its plan has the support of more than 87 percent of its senior secured debt-holders.
Under the proposal, the company would either be sold through a competitive process or restructured with $2.75 billion in new debt, with almost all the equity going to the secured creditors.
“The plan has been overwhelmingly accepted,” Marc Kieselstein, a lawyer for the company, said at Tuesday’s hearing. The company doesn’t anticipate any disruption to the road operations, he said.
Open since 1956, the road spans 157 miles across northern Indiana, connecting Chicago to major East Coast traffic arteries, according to its website.
ITR Concession, owned by international consortium Cintra-Macquarie, acquired the rights to operate the road in 2006 from the Indiana Finance Authority, according to a company statement.
The company is affiliated with Cintra, a Spanish company that is set to start construction on I-77 toll lanes from the Brookshire Freeway in Charlotte to Exit 36 in Mooresville. Cintra said in August that construction is set to begin in spring or summer next year, with the lanes opening four years after that.
The $650 million I-77 project will include two toll lanes in each direction from the Brookshire Freeway (I-277) to Exit 28 in Cornelius and one toll lane in each direction from Cornelius to Mooresville. The same number of general purpose lanes as exist today will be maintained. Cintra will operate the lanes and collect the tolls for 50 years.
Critics of the project, such as the group Widen I-77, have said the road should instead be widened with traditional general purpose lanes.
In recent years, traffic has plunged on the Indiana road, leading to slower-than-anticipated earnings growth and forcing the company to devote an ever-greater share of operating income to debt service.
The sale process or restructuring could run until next August, after the company exits court protection. ITR Concession’s unsecured creditors, who are owed about $8 million, its only other listed debt, will be paid in full under either scenario.
“We think there will be a robust level of interest” from buyers, Kieselstein told the court. “This is a unique, one-of-a-kind asset in the U.S., if not the world.”
Observer staff writer Ely Portillo and Bloomberg News contributed.