Harvey Gulf Files for Chapter 11 Restructuring
This week, U.S.-based offshore vessel operator Harvey Gulf followed 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's board and its senior lenders have voted to approve a restructuring plan that would "substantially deleverage [Harvey's] capital structure" to position it for "continued long-term success." Harvey Gulf seeks to 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, according to the plan. 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.
In its filing, Harvey said that it has assets of between $100-500 million, debts exceeding $1 billion, a roster of 500 mariners and a fleet of 60 ships, including the high-spec MPSV Harvey Sub-Sea and the LNG-fueled OSV Harvey Freedom.
Harvey's advisors for the filing include Vinson & Elkins, Blank Rome, Stephens Inc., Postlethwaite & Netterville and Deloitte Tax.