Af­ter an­nounc­ing re­brand, Vir­gin Trains goes pub­lic

Miami Herald (Sunday) - - Local & State - BY ROB WILE [email protected]­ami­her­ald.com

UN­DER SO-CALLED ‘QUIET PE­RIOD’ RULES, A COM­PANY FIL­ING A REG­IS­TRA­TION STATE­MENT MUST AWAIT SEC AP­PROVAL BE­FORE MAK­ING FUR­THER PUB­LIC STATE­MENTS.

On the same day it an­nounced a ma­jor re­brand­ing as Richard Bran­son’s Vir­gin Group be­came an in­vestor, the pri­vate train com­pany for­merly known as Bright­line qui­etly filed with the Se­cu­ri­ties and Ex­change Com­mis­sion to be­come a pub­licly traded com­pany.

Vir­gin Trains USA, the name the com­pany said Fri­day it would for­mally adopt, filed an S-1 form stat­ing its in­tent to be­gin trad­ing its shares on the open mar­ket.

A Bright­line spokesper­son de­clined to com­ment, cit­ing fed­eral se­cu­rity laws. Un­der so-called “quiet pe­riod” rules, a com­pany fil­ing a reg­is­tra­tion state­ment with the SEC must wait for SEC ap­proval be­fore it can make ad­di­tional pub­lic state­ments.

“We are the first new ma­jor pri­vate pas­sen­ger in­ter­city rail­road in the United States in over a cen­tury, and we be­lieve our busi­ness rep­re­sents a scal­able model for twen­ty­first cen­tury pas­sen­ger travel in North Amer­ica,” the com­pany says in the fil­ing. “Our goal is to build rail­road sys­tems in North Amer­ica that con­nect ma­jor metropoli­tan ar­eas with sig­nif­i­cant traf­fic and con­ges­tion. We be­lieve that the eco­nomics of pas­sen­ger rail ser­vice of­fer a high- ly com­pelling in­vest­ment op­por­tu­nity.”

In the fil­ing, Vir­gin Trains says it an­tic­i­pates its Florida pas­sen­ger rail ser­vice, with stops in Mi­ami, Fort Laud­erdale, West Palm Beach, and, even­tu­ally, Or­lando and Tampa, “will sta­bi­lize by the fourth quar­ter of 2023 or the first quar­ter of 2024,” af­ter a “ramp up pe­riod” of ap­prox­i­mately two years.

Dur­ing this pe­riod, the com­pany said, it ex­pects rid­er­ship to in­crease “as trav­el­ers be­come ac­quainted with the new rail ser­vice and ad­just their trip-mak­ing habits.”

The com­pany uses pro­jected rid­er­ship to Or­lando for its fi­nan­cial out­look, fore­cast­ing an even­tual to­tal of 6.6 mil­lion riders an­nu­ally, pay­ing $73 in fares.

“We ex­pect to of­fer ser­vice be­tween Mi­ami and

Or­lando for fares that are lower than the cost of driv­ing or fly­ing for in­di­vid­ual trav­el­ers,” the com­pany says in the fil­ing. “Based on our ex­pected fares for an in­di­vid­ual trav­eler, we ex­pect that a trip on our trains be­tween Mi­ami and Or­lando will be ap­prox­i­mately 25% less ex­pen­sive than driv­ing and ap­prox­i­mately 30% less ex­pen­sive than fly­ing. We ex­pect to carry ap­prox­i­mately 6.6 mil­lion pas­sen­gers an­nu­ally.”

The com­pany does not state its cur­rent rid­er­ship to­tals, in­stead point­ing to a 42 per­cent in­crease in rid­er­ship in the sec­ond quar­ter of 2018 com­pared to the first quar­ter of 2018, and a 50 per­cent rid­er­ship in­crease in the third quar­ter of 2018 com­pared to the sec­ond quar­ter of 2018.

In Oc­to­ber, a pub­lic fil­ing re­lated to the com­pany’s debt showed Bright­line’s pas­sen­ger count stood at 106,090 for the months of April, May and June, and to­tal rid­er­ship at 180,870 year-to-date.

“The trends driv­ing growth are con­tin­u­ing and, as a re­sult, our man­age­ment ex­pects that rid­er­ship in the fourth quar­ter of 2018 will con­tinue to demon­strate strong lev­els of growth,” the com­pany says in the fil­ing. “We be­lieve our new brand and re­la­tion­ship with the Vir­gin Group could help ac­cel­er­ate our rid­er­ship growth in the fu­ture as we con­tinue to move to­ward achiev­ing sta­bi­lized rid­er­ship.”

The com­pany also dis­cusses its plans to de­velop real es­tate ad­ja­cent to its sta­tions, us­ing Florida East Coast In­dus­tries, its par­ent com­pany, as pri­mary de­vel­oper.

The com­pany states its de­sire to ex­pand to other routes, in­clud­ing At­lanta to Char­lotte, North Carolina, Dal­las to Hous­ton, and Los An­ge­les to San Diego. That’s in ad­di­tion to its pro­posed Tampa-Or­lando route, and its re­cently ac­quired South­ern Cal­i­for­nia-to-Las Ve­gas route.

The com­pany is owned by Fortress In­vest­ment Group, which also owns Florida East Coast In­dus­tries, a direct de­scen­dant of Henry Fla­gler’s Florida East Coast Rail­way Co.

The S-1 fil­ing pro­vides a look into the com­pany’s cur­rent fi­nan­cial sta­tus.

For the first nine months of 2018, the com­pany was op­er­at­ing at a loss of more than $87 mil­lion. Over the same pe­riod, it grossed more than $5 mil­lion in rev­enue. Its debt stands at more than $600 mil­lion, and to­tal cash stands at about $49 mil­lion.

Since Bright­line be­gan test­ing in 2017, at least seven peo­ple have died in ac­ci­dents. There have also been mul­ti­ple non-fa­tal in­ci­dents, in­clud­ing one in Pom­pano Beach. In most, po­lice re­ports have not cited Bright­line as the at-fault party.

The com­pany clas­si­fies it­self as “an emerg­ing growth com­pany,” which un­der se­cu­ri­ties law means it “may take ad­van­tage of cer­tain re­duced dis­clo­sure and other re­quire­ments that are oth­er­wise ap­pli­ca­ble gen­er­ally to pub­lic com­pa­nies.”

PE­DRO POR­TAL ppor­[email protected]­ami­her­ald.com

Christina White, Mi­ami-Dade County Elec­tions Su­per­vi­sor, speaks to mem­bers of the can­vas­ing board on Satur­day.

CHARLES TRAINOR JR. Mi­ami Herald

A Bright­line train — now Vir­gin Trains USA — ar­rives at the Mi­amiCen­tral sta­tion in Over­town. The com­pany has filed pa­pers with the SEC to go pub­lic.

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