David Foxwell reflects on news that another US offshore vessel owner, GulfMark, is exiting bankruptcy proceedings
Slowly but surely offshore vessel owners in the US are getting back on their feet, dusting themselves down and resuming normal business.
As OSJ reported in early August Tidewater in the US has emerged from bankruptcy proceedings.
Now, as OSJ exclusively highlighted earlier this week GulfMark Offshore is due to exit bankruptcy, even if its Chapter 11 process has taken somewhat longer than originally anticipated.
GulfMark’s president and chief executive officer, Quintin Kneen, told OSJ that the final piece of the Chapter 11 process was put in place last week. By the time you read this, if all goes according to plan, the company will have exited Chapter 11.
As I noted earlier this week, Mr Kneen said one aspect of the plan that was critical was that GulfMark would have a ‘runway’ with adequate liquidity for the next three years. “We will easily have this,” Mr Kneen told me, noting that the company’s noteholders had been supportive but that finding a bank to provide ongoing financing on reasonable terms “was more difficult than we expected.” Enter DNB, whose efforts Mr Kneen described as “heroic.” Also part of the deal that will get GulfMark airborne again is UK fund Hayfin.
With Tidewater and GulfMark now airborne again the next in line on the runway is Hornbeck Offshore. It isn’t in Chapter 11 proceedings of course, but there is a lot to do to get it ready to take to the air again with a certificate of airworthiness.
Its latest investor presentation said it had 41 vessels in layup, not earning but not costing it as much as they would if operational. It has long acknowledged that it cannot repay the full amount of senior notes due in 2020 and 2021 but it has a new loan that provides additional liquidity and extends the maturity date for the money.
Another big plus for Hornbeck is it has one of the youngest, most modern fleets of offshore vessels in the industry. Were that not the case, getting airborne again would prove a lot more difficult. No doubt normal service will be resumed before long, but it could be a while before it lumbers up to the runway and what form a solution to its difficulties might take isn’t clear yet.