Seko Logistics has admitted that it has had to refinance, but was at pains to point out that it had not defaulted on debt repayments.
Seko said it had entered into a “definitive agreement on a transaction with its key financial partners” to “reinforce” the company’s finances, and allow it to continue to invest.
It noted that “importantly, the company’s existing leadership will remain in place”, as it also “continues to benefit from the support of existing shareholders”.
However, some shareholders may face dilution as far as their holdings are concerned, although this is unconfirmed. Seko Logistics, via a newly appointed communications company which specialises in restructurings, declined to respond to any further questions, including on shareholdings.
“With the recapitalisation and scalable go-forward business plan, Seko will enter an exciting new phase with the financial and strategic foundation to create the future of logistics,” said James Gagne, CEO.
“The ongoing freight recession has impacted the entire market, and by proactively addressing our balance sheet we will be at the forefront of the industry, better equipped to navigate these challenges and provide exceptional value to our clients and partners around the world.
“With significant new investment, we will build on our momentum to capitalise on emerging opportunities and expand the global reach of our mission-critical service offerings as the industry recovers.”
Seko received debt financing with a majority recapitalision in 2021, from Ridgmont Equity Partner. Lenders were Barings, Blackstone Credit, Churchill Asset Management and Manulife Investment Management. Its previous majority shareholder, Greenbriar Equity, which has stakes in handler AGI and Uber Freight, retained a “significant equity stake”.
Seko hit the headlines over the summer when it was suspended from participation in Entry Type 86, following a crackdown on ecommerce by the US CBP. It said at the time it was “incredibly disappointed” and strongly disagreed with the decision – so much so, in fact, that it began to take legal action against the government. However, shortly afterwards, it voluntarily dismissed the case.
Seko has built up a strong customs brokerage business for ecommerce, and the move no doubt hit it hard.