Hornblower Recapitalizes Through Bankruptcy, Closing American Queen Voyages
Hornblower Group, which operates ferries, excursion boats, and had an inland cruise line, filed for bankruptcy as part of a recapitalization plan with an alternative investment firm. The company’s cruise line, American Queen Voyages, officially suspended operations and was placed up for sale as the new owners reportedly plan to focus on the ferries and day tours leaving the overnight cruise business.
Hornblower, which was started in 1980, has acquired city tour companies and expanded its excursion business since it was acquired in 2018 by Crestview Partners, a private equity firm. They purchased American Queen, which had been started in 2011 as a successor to a well-known Mississippi River cruise line, and built up its operations ultimately with four traditional river cruise boats as well as adding two small coastal cruise ships and chartering a cruise ship for Alaska cruises.
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 operation was branded City Experiences, which along with the ferry operations, continues to “deliver excellent results,” according to the new investors. The group’s other division, Journey Beyond, an Australian-based tour operator, will continue wholly owned by Crestview.
The company cites the “underperformance of American Queen Voyages, which has not rebounded from the pandemic,” in announcing the recapitalization plan which includes a sale of the majority position in Hornblower to Strategic Value Partners. American Queen had recently suspended its cruises saying it hoped to resume cruises this spring. It had announced last year it would sell its two coastal cruise ships, which were laid up in October 2023.
Hornblower says it will “move ahead with a more focused portfolio, strong balance sheet, and additional financial flexibility.” In today’s bankruptcy filing in Texas and ancillary proceedings in Canada, they listed between $1 billion and $10 billion in debt saying they would shed $720 million during the reorganization. Deutsche Bank Private Credit & Infrastructure is providing $300 million in debtor-in-possession financing to continue the operations of the excursions and ferries uninterrupted, while Strategic Value Partners and Crestview Partners will provide Hornblower with $121 million in new-money financing.
The company said due to the overwhelming support of its investors, Hornblower expects to move through this process on an accelerated basis. They projected emerging from bankruptcy in approximately four months. Journey Beyond is not included in the bankruptcy proceeding.
Passengers booked for the cruises on American Queen will be able to seek refunds and the company has a Federal Maritime Commission bond. Hornblower reported that it has put the company up for sale with reports that there is interest in the riverboats, which include the American Queen, American Duchess, and American Countess, all of which operated on the Mississippi, and the American Empress which operated on the Columbia and Snake rivers. However, they said if a sale cannot be achieved, it would wind down the operations of the cruise line.