Stock Photo: Darryl Brooks / Shutterstock.com
American Queen Voyages, a leading U.S. river cruise company, is shutting down operations as parent Hornblower Group announces a deal to reduce debt.
Hornblower Group has announced a significant investment agreement with Strategic Value Partners, LLC, a global alternative investment firm. The deal will see Strategic Value Partners (SVP) acquire majority ownership of Hornblower and provide a substantial equity investment to help strengthening the company’s financials.
Crestview Partners will maintain a considerable minority stake in Hornblower and become the sole owner of Journey Beyond, a leading experiential travel provider in Australia under Hornblower’s umbrella.
The agreement, which also includes $121 million in new-money financing from SVP-managed funds and Crestview, will reduce the company’s total debt by roughly $720 million.
As part of the agreement, Hornblower’s underperforming overnight cruising business, American Queen Voyages (AQV), will either be sold or its operations wound down. A statement posted to the AQV website said the company has ceased operations and is issuing refunds on passenger deposits.
“Despite great efforts by our team, crew and partners, American Queen Voyages (AQV) unfortunately has been unable to rebound from the effects of the pandemic. The overnight cruise industry was especially affected by changes in travel preferences and, as a result, AQV has become financially unsustainable,” American Queen Voyages said. “We are therefore shutting down the business, and all future AQV cruises have been cancelled.”
Hornblower Group CEO, Kevin Rabbitt, states that the sale will allow the company to focus on its core land-based and water-based experiences businesses, which are yielding excellent results. “The steps we are taking today will enable us to address AQV and strengthen our financial foundation as we continue serving our guests and commuters around the world,” Rabbitt said.
Hornblower has assured that outside of American Queen Voyages, its current services will not be affected by the transaction. All services, booked trips, excursions, and other offerings are set to continue as planned.
To facilitate the agreement and the sale or winding down of American Queen Voyages, Hornblower and some of its affiliates have initiated a voluntary court-supervised process under Chapter 11 of the U.S. Bankruptcy Code.
This is expected to last about four months, backed by a $300 million commitment from Deutsche Bank Private Credit & Infrastructure to refinance the Company’s existing superpriority term loan, in addition to the $121 million in new-money financing from SVP-managed funds and Crestview.
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