Court Approves Harvey Gulf's Restructuring Plan
On Wednesday, a federal court in Houston confirmed OSV operator Harvey Gulf's prepackaged bankruptcy plan. The approval follows 77 days after Harvey Gulf’s prepackaged filing, a faster turnaround than all previous Chapter 11 proceedings for vessel operators over the last five years, according to Harvey.
“My competitors have been telling our customers, lenders and vendors that Harvey Gulf is not going to survive the Chapter 11 process," said Harvey Gulf CEO Shane Guidry. "Not only does our emergence show they were wrong, but the speed with which we have been able get final court approval also shows the disingenuous nature of their efforts – or smear tactics."
In March, Harvey Gulf followed many of its peers in filing for a prepackaged Chapter 11 bankruptcy proceeding. Harvey cited the offshore market downturn as the underlying reason for the restructuring, which primarily consists of a debt-for-equity swap. Harvey will pay its suppliers in full, and only senior lenders will be affected by a proposed stock swap. Their claims will be exchanged for new stock.
The debts affected include three credit facilities totaling to $1.2 billion. In addition, as part of the agreement, private equity group The Jordan Company will relinquish claims on Harvey Gulf's shipyard, the Gulf Coast Shipyard Group. Harvey Gulf described the yard as an important asset to retain for an eventual market turnaround.
"As I have been telling my customers and others in the industry, this has always been a debt for equity swap, with no changes in operations, personnel, safety, etc. This will be best shown by Harvey Gulf’s achievement of 5 years without a recordable incident company-wide this coming August – something no one in our industry has done for as long as I can remember," said Guidry.
Harvey says that it has recently entered into three long term charters with Hess for two 310-foot LNG-powered platform supply vesses and one 300-foot PSVs, which will replace vessels previously operated by Aries Marine and recently bought by Hornbeck.