Harvey Gulf International Marine filed with the U.S. Bankruptcy Court a Joint Prepackaged Chapter 11 Plan of Reorganization and related Disclosure Statement.
According to the disclosure statement, “The primary objective of the Plan is the deleveraging of the Debtors’ balance sheet through the consensual equitization of approximately 70% of the Debtors’ approximately $1.2 billion in secured debt under the Credit Agreement. This deleveraging will right-size the Debtors’ balance sheet, eliminate burdensome covenants and amortization payments, and reduce interest expense on an annual basis by approximately $47 million. Improved cash flow will enable the Debtors to offer more attractive pricing to their customers and to maintain and expand their state-of-the-art fleet. The Plan also encompasses a settlement with TJC, whereby, among other things, HGIM Group, LLC, an affiliate of TJC, contributes its equity interests in a shipyard in Gulfport, Mississippi. This Shipyard is important to the Debtors’ operations because, among other things, its allows the Debtors’ to construct new vessels and service its existing vessels without relying on a third-party shipyard. Importantly, the Plan does not impair General Unsecured Creditors, preserving the Debtors’ relationships with valued trade and contract counterparties. Moreover, the transactions contemplated by the Plan ensure that the Debtors remain compliant with the Jones Act, an essential requirement for the Debtors’ business operations.”
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