US Bans Imports From Chinese Fishing Company Citing Seafarer Welfare
By David Lawder (Reuters) – U.S. Customs and Border Protection on Friday imposed a new import ban on seafood from a Chinese fishing fleet that the agency says is using...
By Claire Boston and Katherine Doherty (Bloomberg) –The operator of the cash-strapped NYC Ferry system has lined up $90 million of financing to help keep its tourist boats and commuter lines running by pledging some of its Niagara Falls assets to creditors.
Hornblower Group moved the assets from the Niagara Cruises business into an unrestricted subsidiary, putting them beyond the reach of current creditors, according to people with knowledge of the matter. Those assets were then used as collateral to obtain new cash that will help NYC Ferry’s parent weather the pandemic, said the people, who asked not to be named discussing a private transaction.
Hornblower, which operates ferries to tourist destinations like the Statue of Liberty and Alcatraz Island, has been burning through cash as travel dried up amid the pandemic, and some venues remain closed. Concern about NYC Ferry’s viability has been rising with the approach of colder months, when tourist traffic is typically the weakest.
The company previously drew down a $75 million credit line and accepted a $45 million line of credit from Crestview Partners, its private equity backer. San Francisco-based Hornblower is also getting financial advice from Guggenheim Partners, the people said.
“Hornblower Group just completed a successful round of raising capital to ensure positive liquidity through our traditionally slower seasons into the spring of 2021 and allows us to continue to grow, operate and service our guests,” a representative for Hornblower said in a statement. He declined to comment on specific deal terms.
A representative for Guggenheim declined to comment, and a representative for Crestview didn’t immediately respond to a message.
After investors received word of the financing on Tuesday, Hornblower Group’s $675 million first-lien loan due 2025 was quoted around 71 cents on the dollar, down from the mid 80s earlier in the week, the people said.
The NYC Ferry was struggling even before the pandemic and relies heavily on city subsidies. While Hornblower’s commuter lines along New York’s East River are running, there are fewer passengers and some tourist routes remain dormant. The Niagara Falls unit, which operates on the Canadian side, is running with health and safety screenings, physical distancing, timed ticketing and reduced capacity, according to its website.
Hornblower’s exclusive contract for Statue of Liberty and Ellis Island tours comes up for auction in March, and Hornblower is likely to submit a bid to keep the business.
Moving assets into unrestricted subsidiaries can help debt-laden companies shore up cash and gain flexibility. The maneuver means existing creditors have less say over how the company runs its finances and less ability to make claims on those assets if the borrower defaults.
More firms suffering from tight liquidity are opting to transfer assets into new units since the Covid-19 pandemic took hold in March, credit researcher Covenant Review has found.
Bookings operator Travelport LLC drew creditor ire earlier this year after trying to transfer assets into an unrestricted subsidiary earlier this year. The parties ultimately called a truce, and lenders helped fund a debt restructuring in exchange for Travelport undoing the move.
Companies including Serta Simmons Bedding LLC and Sinclair Broadcast Group Inc. have hinted at or completed asset transfer deals this year. One of the first such transactions was in 2016, when J. Crew Group Inc. started discussing moving intellectual property and other assets into a subsidiary that creditors couldn’t reach, stoking controversy and litigation.
© 2020 Bloomberg L.P
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