Seacor Marine Holdings Inc. has made a stalking horse bid to form a joint venture with Montco Offshore Inc., the Galliano, La., liftboat company that filed for Chapter 11 bankruptcy protection in March.
The deal would be Seacor’s second recent acquisition of a bankrupt company. International Shipholding Corp. (ISH) was expected to emerge from bankruptcy as a Seacor Holdings Inc. subsidiary by July 3. Seacor Holdings just spun off Houma, La.-based Seacor Marine, its OSV fleet trading under SMHI.
The joint venture would consoldiate 13 liftboats currently operated by a subsidiary of Seacor Marine, six liftboats operated by Montco and two liftboats operated by a joint venture of the two companies, said Seacor, which will be the majority owner. It would assume about $130 million of indebtedness from Montco's credit facilities and about $76 million of indebtedness on Seacor Marine's financial statements.
Founded in 1948, Montco has 99 employees and a fleet that includes two 335' liftboats, two 245' and two 235'. The 335' Jill completed in 2014 is the newest. Construction takes about two years, so "given the current instability of the market and uncertainty with respect to future work streams," Montco is not building any new vessels, according to court filings.
Montco is not alone in its predicament.
“With the downturn in the oil and gas industry and the sustained decrease in commodity prices from the beginning of the second half of 2014 through early 2016, companies across the industry faced severe pressures in terms of reduced revenue streams, earnings and cash flows, as well as increasing difficulties to meet certain creditor obligations,” Montco said in its initial filings. “These market conditions have impacted oil and gas companies at every level, as many companies in the industry have filed for bankruptcy protection since the beginning of 2015.”
For Montco’s niche in particular, “oil and gas companies have substantially deferred maintenance and P&A [plugging and abandonment] work in order to conserve cash during the downturn,” leading to a drop in demand for its services.
A hearing in the case is scheduled for July 18 at the U.S. bankruptcy court for the Southern District of Texas in Houston.
