Harvey Gulf International Marine makes pre-packaged bankruptcy filing

By Caroline Salls

Pittsburgh, March 8 – Harvey Gulf International Marine, LLC made a pre-packaged Chapter 11 bankruptcy filing Wednesday in the U.S. Bankruptcy Court for the Southern District of Texas.

Chairman of the board and chief executive officer Shane J. Guidry said in a statement filed with the court that the company, its lenders and equity sponsor the Jordan Co., LP (TJC) reached an agreement on the terms of a comprehensive restructuring transaction, which formed the foundation for Harvey Gulf’s pre-packaged plan of reorganization.

Guidry said the plan will substantially deleverage the debtors by converting nearly $1 billion in secured debt into equity, thereby right-sizing the company’s balance sheet, eliminating burdensome covenants and amortization payments and reducing interest expense by about $47 million per year.

In addition, Harvey Gulf will convert a substantial part of its $1.22 billion in secured credit agreement debt into a new $350 million first-lien term loan facility, and the secured lenders will receive their share of the exit facility and 100% of the reorganized company’s equity, subject to dilution by a management incentive plan.

Under the incentive plan, management will receive 3% of the equity and three series of warrants in a total amount equal to 11% of the equity on a fully diluted basis.

Trade creditors/general unsecured creditors are unimpaired under the plan and will receive payment in full in the ordinary course of business.

Holders of existing interests will receive no distribution.

The plan also includes a settlement that resolves all claims between the TJC parties and Harvey Gulf.

Specifically, the TJC parties, through HGIM Group, LLC, will contribute their equity interests in shipyard entities to the debtors and will receive two series of warrants in a total amount equal to 4% of the reorganized HGIM equity, subject to dilution by the management incentive plan.

In connection with the bankruptcy filing, the company is seeking court approval to use the cash collateral of its pre-bankruptcy secured parties to fund its operations while in Chapter 11.

According to court documents, Harvey Gulf has $1 billion to $10 billion in both assets and debt.

The company did not list any unsecured creditors with claims of $1 million or more.

Vinson & Elkins LLP is representing Harvey Gulf in the Chapter 11 proceedings.

Harvey Gulf is a New Orleans-based marine transportation company. The Chapter 11 case number is 18-31080.

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