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Bankruptcy Court Approves Plan for Sale of Hornblower

Hornblower tour boat
Hornblower will focus on its excursion cruises and ferries as well as land tours ending its cruise line (Hornblower)

Published Jun 8, 2024 6:49 PM by The Maritime Executive

 

The bankruptcy plan for Hornblower Group has been approved by the U.S. Bankruptcy Court for the Southern District of Texas setting the stage for the company to emerge from the reorganizational bankruptcy filed in February. Under the plan, the company will be recapitalized with new ownership and will focus its operations on its tour boat and ferry operations after shedding its overnight cruise businesses.

“With the court’s approval of the plan, we are closer to emerging as a stronger company, with a more focused portfolio and additional financial flexibility to fuel our growth,” said Kevin Rabbitt, Hornblower's Chief Executive Officer. “We look forward to completing this process and continuing to build on our position as a global leader in world-class experiences and transportation.” 
The company which reported in February that it had between $1 billion and $10 billion in debt, said it will have reduced its debt by approximately $720 million during the reorganization. It will also substantially increase liquidity.

Majority ownership of Hornblower is passing to funds managed a Strategic Value Partners, a private investment firm with more than $18 billion under management. Crestview Partners, a private equity firm that acquired Hornblower in 2018, will retain a minority position and take sole ownership of the tour company Journey Beyond based in Australia.

Hornblower, which was started in 1980, had acquired city tour companies and expanded its excursion business. The excursion business includes Boston Harbor Cruises which dates to 1926, as well as Potomac Riverboat Cruises in Alexandria, Virginia, Spirit Cruises in Norfolk, Virginia, Niagara Cruises, Alcatraz Cruises, and many others in the U.S. and Canada, as well as international operations including in London, England. The company also has ferry operations and a maintenance yard in Bridgeport, Connecticut.

In filing for bankruptcy, the company cited the “underperformance of American Queen Voyages, which has not rebounded from the pandemic.” American Queen was operating river cruises on the Mississippi and in the Pacific Northwest as well as two coastal cruise ships. As part of the bankruptcy, they announced an intention to sell or wind down American Queen.

The company’s four river cruise boats were sold in a private transaction to American Cruise Lines. Subsequently, American Cruise Lines sold two of the paddlewheeler riverboats, American Duchess and American Countess, which had been converted into cruise ships from gambling barges, for scrap. The American Queen, which was the largest river paddlewheeler ever built with accommodations for 436 passengers, is reported to need costly technical work. American Cruise Line said it would explore donating the vessel although recent reports infer it has also been moved to a recycling yard. Future opportunities for the American Empress were reportedly still being explored.

American Queen’s coastal vessels had ended service in October 2023. They were sold as part of the bankruptcy to their former owner, John Waggoner, who says he plans to restart their service in 2025. The cruise line also had an exploration ship on summer charters for Alaska cruises. That ship, Ocean Victory, reverted to Sunstone Ships and is set to start a new Spanish cruise line Alma Cruceros in 2025.