Hornblower Group, a provider of travel transportation experiences, entered an agreement with its investors under which Strategic Value Partners (SVP) will acquire majority ownership of the company and provide an equity investment in the business. In addition, Crestview Partners will retain a significant minority position in Hornblower and become the sole owner of experiential travel provider Journey Beyond, a standalone operating unit of Hornblower. The agreement also provides for Hornblower to receive $121 million in new-money financing from SVP-managed funds and Crestview, and the company’s total debt will be reduced by approximately $720 million.
In connection with the agreement, Hornblower’s overnight cruising business American Queen Voyages (AQV) will be sold or, if a sale cannot be achieved, wound down. Hornblower is taking this action because of the underperformance of AQV, which has not rebounded from the COVID-19 pandemic. Outside of AQV, Hornblower’s current services, including Journey Beyond, will not be impacted by the transaction.
To implement the agreement and ensure an orderly sale or wind-down of AQV, Hornblower and certain of its affiliates initiated a voluntary court-supervised and pre-arranged process under Chapter 11 of the U.S. Bankruptcy Code. Journey Beyond is not included in the court-supervised process.
Due to the support of its investors, Hornblower expects to emerge from Chapter 11 bankruptcy in approximately four months.
In connection with the bankruptcy process, Hornblower received a commitment for $300 million in debtor-in-possession financing from Deutsche Bank Private Credit & Infrastructure to refinance the company’s existing super-priority term loan. Following court approval, this new financing, combined with cash generated from ongoing operations, is expected to support the business during the court-supervised bankruptcy process.
Separately, Hornblower is commencing ancillary proceedings in Canada under the Companies’ Creditors Arrangement Act (CCAA) seeking recognition of the U.S. Chapter 11 bankruptcy proceedings in Canada.
Guggenheim Securities is serving as investment banker to Hornblower, while Alvarez & Marsal North is serving as financial advisor. In addition, Paul, Weiss, Rifkind, Wharton & Garrison is serving as the company’s legal counsel and Porter Hedges is serving as co-counsel.
Perella Weinberg Partners is serving as investment banker to SVP and other Hornblower lenders, while FTI Consulting is serving as financial advisor and Milbank is serving as legal advisor.
PJT Partners is serving as financial advisor to Crestview, while Davis Polk & Wardwell is serving as legal counsel and Vinson & Elkins is serving as co-counsel.
