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Harvey Gulf International Marine pre-packaged plan effective July 2
By Caroline Salls
Pittsburgh, July 2 – Harvey Gulf International Marine, LLC’s plan of reorganization took effect on Monday, according to a notice filed with the U.S. Bankruptcy Court for the Southern District of Texas.
The plan was confirmed on May 23.
As previously reported, the plan will substantially deleverage the debtors by converting nearly $1 billion of secured debt into equity, thereby right-sizing the company’s balance sheet, eliminating burdensome covenants and amortization payments and reducing interest expense by about $47 million per year.
In addition, Harvey Gulf will convert a substantial part of its $1.22 billion of secured credit agreement debt into a new $350 million first-lien term loan facility, and the secured lenders will receive their share of the exit facility and 100% of the reorganized company’s equity, subject to dilution by a management incentive plan.
Trade creditors/general unsecured creditors are unimpaired under the plan and will receive payment in full in the ordinary course of business.
Holders of existing interests will receive no distribution.
The plan also includes a settlement that resolves all claims between the TJC parties and Harvey Gulf.
Specifically, the TJC parties, through HGIM Group, LLC, will contribute their equity interests in shipyard entities to the debtors and will receive two series of warrants in a total amount equal to 4% of the reorganized HGIM equity, subject to dilution by the management incentive plan.
Harvey Gulf, a New Orleans-based marine transportation company, filed for bankruptcy on March 7. The Chapter 11 case number is 18-31080.
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