Hornbeck Executes Contracts for Newbuilds, $720 Million

From Marine Log
17 November 2011

Hornbeck Offshore Services, Inc. (NYSE: HOS) says it has executed definitive contracts for the construction of sixteen high-specification offshore supply vessels. Deliveries will take place between the second quarter of 2013 and fourth quarter of 2014.

VT Halter Marine, Inc. of Pascagoula, Mississippi and Eastern Shipbuilding Group, Inc. of Panama City, Fla, will each build eight 300 class vessels, with options to build additional vessels. Hornbeck's first decision with respect to the exercise of options will need to be made in September 2012. Delivery dates for option vessels will be approximately 26 months following the option exercise.

The total cost of the first sixteen vessels under this program is expected to be approximately $720 million, excluding construction period interest. Construction costs will be funded with cash on-hand (including the net proceeds of a recently completed equity offering), projected free cash flow from operations and, if necessary, available capacity under the Hornbeck currently undrawn and recently expanded $300 million revolving credit facility.

VT Halter Marine will construct eight vessels based on the Super 320 design that it has developed for Hornbeck Offshore. These DP2 OSVs are designed to have 6,200 long tons of deadweight capacity, approximately 20,900 bbls of liquid mud carrying capability, 11,863 sq. ft. of deck area and a fire-fighting class notation. The Super 320 design is based on a larger version of the HOS Coral, an existing 290 class DP-2 OSV which the company has successfully operated since her delivery in early 2009. The Super 320 design has been developed with particular attention to environmental regulations, including a double-hull that eliminates any fuel storage adjacent to the sideshell, and propulsion machinery that meets the requirements of EPA Tier 3 for stack emissions.

The eight OSVs to be constructed by Eastern Shipbuilding Group will be DP-2 classed. Four vessels will be based on the STX Marine SV 300 design and four will be based on the STX Marine SV 310 design. Features of the STX design include over 20,000 bbls of liquid mud carrying capacity and a fire-fighting class notation. The SV 300 design calls for 5,500 long tons of deadweight capacity and 10,976 sq. ft. of deck space, while the SV 310 design calls for 6,144 long tons of deadweight capacity and 11,536 sq. ft. of deck space. The STX designs meet the same environmental standards as the Super 320 design and will also carry the ENVIRO class notation by the American Bureau of Shipping.


November 17, 2011

General Maritime files for Chapter 11

From Marine Log

17 November 2011

 

Tanker operator General Maritime Corporation (NYSE: GMR) says it has filed for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Substantially all of the company's subsidiaries – with the exception of those in Portugal, Russia and Singapore as well as certain inactive subsidiaries– have also commenced Chapter 11 cases.

The company says the bankruptcy filing is necessary to implement a restructuring agreement reached with its key senior lenders, including its bank group, led by Nordea Bank Finland plc, New York Branch as administrative agent, as well as affiliates of Oaktree Capital Management, L.P.

General Maritime says the restructuring agreement and related equity commitment letter have the support of over two thirds of the company's obligations from its banks and Oaktree. Under terms of the agreements, Oaktree will provide a $175 million new equity investment in General Maritime and convert its prepetition secured debt to equity. Under the terms of the agreement, General Maritime expects to substantially reduce its funded indebtedness and enhance its liquidity profile. It says that operations are expected to continue without interruption.

In conjunction with the filing, General Maritime has received a commitment for up to $100 million in new debtor-in-possession (DIP) financing from a group of lenders led by Nordea as administrative agent. The initial amount of the DIP is $75 million, however, the credit facility contemplates that, if needed, the company will have access to another $25 million of future financing, subject to the applicable lenders' agreement, certain other conditions and further order of the Bankruptcy Court.

November 17, 2011