đ„New Chapter 11 Bankruptcy + CCAA Filing - Hornblower Holdings LLCđ„
After teetering for the past several years, on February 21, 2024, San Francisco-based and Crestview Capital-backed Hornblower Holdings LLC and 103 affiliates (collectively, the âdebtorsâ) filed chapter 11 bankruptcy cases in the Southern District of Texas (Judge Isgur).* The name itself may not be so familiar but if youâve visited big cities and/or explored major tourist sites, thereâs a good chance youâve encountered one of their business divisions. There are three of them:
City Experiences which includes the (a) City Cruises division (public dining and sightseeing cruises and private charters for events and known for, among other things, transportation to the Statue of Liberty, Niagara Falls and Alcatraz Island), (b) Ferry & Transportation division (which includes NYC ferries) and (c) the Walks division, which provides tours and activities in big cities.
American Queen Voyages (âAQVâ), a provider of luxury river and lake cruises.
Journey Beyond, an Australian travel group and one of the debtorsâ more recent M&A acquisitions.
If youâre reading that business description and alarm bells are going off because, duh, this sucker is absolutely NOT pandemic-proof nor continued-WFH proof, pat yourself on the back. Covid-19 absolutely blew these ships out of the water. Okay, luckily not â this ainât the Boeing of ships â but the pandemic did a job on the companyâs balance sheet. Hereâs a look at the cap stack:
Suffice it to say, prior to the pandemic ravaging the debtorsâ business â particularly the AQV division â the debt load was not over $1b. In fact, it was, as of â19, merely $630mm. Interest expense in â19 was $38mm. Currently itâs $115mm. The liquidity need was obvious after revenues went from $690mm in â19 to $175mm in â20. The debtorsâ losses in â20 alone were more than $287mm. REPEAT: $287 MILLION. đ€Ż
The debtors went into triage. First, they obtained a $45mm RCF in May â20. Then in August â20, Crestview put in $30mm of new equity. Those infusions proved feeble against the raging coronavirus. Want to guess what the company did next?
OH YEAH!!