In late May, the U.S. Bankruptcy Court approved the final reorganization plan submitted by Harvey Gulf International Marine.
The approval comes 77 days following Harvey Gulf’s prepackaged filing, considerably faster than all previous Chapter 11 proceedings for vessel operators over the last five years, Harvey Gulf officials said in a statement announcing the plan's approval.
“We really appreciate the diligent and collaborative efforts of all involved in this process — both within the company and from the legal and financial support teams,” Shane Guidry, CEO of New Orleans-based Harvey Gulf, said in the statement.
The company filed for bankruptcy protection on March 6. The filing included plans to convert nearly $1 billion of secured debt into equity, after months of negotiations with major creditors. According to court filings, those moves were designed to “right size” the Harvey Gulf balance sheet and save the company some $47 million annually in debt service costs.
Four days after filing for protection, Guidry sent a letter to customers, pledging to “provide services, and make payments” to all its clients and vendors. The bankruptcy plan was designed to get Harvey Gulf out from under Chapter 11 by April 24.
Guidry said some of his competitors were telling Harvey Gulf’s customers, lenders and vendors that his company was not going to survive the Chapter 11 process. “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,” he said. “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."
Guidry said the strength of his company could best be shown by its achievement, come August, of five years without a companywide recordable incident, “something no one in our industry has done for as long as I can remember,” he said. “It will also be shown by Harvey Gulf continuing to generate more EBITDA (earnings before interest, taxes, depreciation and amortization) post emergence than all of our public competitors combined, just as we have done since 2016, while delivering to our shareholders an average EBITDA margin of 58% during the same time period.”
The company also announced that it recently entered into three long-term vessel charters with Hess for two of its 310' LNG PSVs and one of its 300' PSVs.
