LAS VEGAS (KTNV) — There are questions and concerns about the future of Brightline's rail operations in Florida, and it could impact the company's future projects — including a high-speed rail line between Las Vegas and Southern California.
On Thursday, auditors from Ernst & Young LLP released a financial statements document for Brightline Trains Florida, LLC. in which they expressed "substantial doubt" about the company's ability to continue operating.
Channel 13 obtained and reviewed a copy of that audit from the Municipal Securities Rulemaking Board, which you can also read below:
"The Company requires funds to service its debt and meet such other obligations as they become due and has stated that it does not currently have the liquid funds necessary to service its debt and meet such other obligations as they become due," the document reads in part.
According to Bloomberg, Brightline Florida currently has $5.5 billion in debt and about $131 million in cash.
Brightline Florida officials stated, "while we do not currently have the liquid funds necessary to repay the indebtedness and meet such other obligations as they come due, management is working to consummate one or more additional capital raises."
The company was supposed to make interest payments earlier this year, but the grace period was pushed back to June 15.
Over the past year, several credit rating agencies made a series of bond rating downgrades, including Fitch Ratings. A company press release states Brightline was downgraded to CCC status, which is considered a high-risk, speculative bond.
This has brought up concerns about the future of the Brightline West project between Las Vegas and Southern California. Even though it is a separate company with separate funding from Brightline Florida, they are both owned by the same parent company, Fortress Investment Group.
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The overall estimated cost of the Brightline West project is expected to now be $21 billion, which is up from previous estimates due to construction costs.
Right now, the project has secured $3 billion in federal funding from the Bipartisan Infrastructure Law and $2.5 billion in private activity bonds. The bond holders have approved pushing a deadline back from March 31 to Aug. 1 to allow Brightline to raise $400 million for construction.
In September, Brightline West officials also applied for a $6 billion loan from the federal government through the Railroad Rehabilitation and Improvement Financing program. The decision on that loan is still pending, as of Tuesday afternoon.
Channel 13 reached out to Brightline West officials to learn more about where current funding stands, additional information about the bond deadline being pushed back, and if they had concerns about the funding situation in Florida. They provided the following statement:
"Our agreement with bondholders provides the necessary time to conclude our construction contracting and financing activities, including our pending federal financing application.
Brightline West is America's best opportunity to deliver high-speed rail — built on disciplined cost management, thoughtful execution, and private-sector efficiency. We are grateful for the support of our bondholders and partners, which allows us the runway needed to develop high speed rail in America."
Brightline West construction plans have been delayed from initial estimates.
Last January, the company said they wouldn't meet their original deadline to open the rail line by the 2028 Olympics in Los Angeles. Now, they're targeting an opening in late 2029.
Channel 13 has also reached out to the Nevada Department of Transportation and the federal Department of Transportation to see if there are any concerns about the future of the Brightline West project and any potential funding.
The California High-Speed Rail Authority declined to comment on the matter.
As of the time this article was published, we have not heard back.