Hornbeck sells off tug and barge fleet

Hornbeck Offshore Services Inc. (HOS) has sold its tug and tank barge fleet to Houston-based Genesis Marine for $230 million. The fleet consists of nine tugs and nine double-hulled tank barges. Genesis Marine, an affiliate of Genesis Energy, put down a $23 million deposit on Monday.

HOS expects to use the after-tax proceeds from this transaction for general corporate purposes, which may include retirement of debt or funding for the acquisition, construction or retrofit of vessels.  

“Given the substantial pending growth in our Upstream fleet over the next few years as a result of previously announced newbuild and retrofit programs and any incremental organic or acquisitive growth that may arise, we believe that the timing is right to divest of our non-core Downstream segment in order to strategically focus our energies on our Upstream core business,” said Todd Hornbeck, chairman, president and CEO of HOS. “Due to the recent recovery in Downstream market conditions since the financial collapse of 2008, we were able to monetize our active TTB fleet at what we believe to be a very fair price — above our original investment in these assets — and believe that the redeployment of that capital in our Upstream business will unlock value for our shareholders. Our ability to enter into this agreement is a testament to the excellent operational track record and quality of our valued Downstream workforce that we and Genesis are fortunate to have in our future.”

J.P. Morgan Securities LLC acted as exclusive financial advisor to Hornbeck Offshore with respect to this transaction.

The transaction is subject to customary closing conditions and regulatory clearances, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Act and is anticipated to close by the end of the third quarter of 2013. Hornbeck and Genesis also plan to enter into transition service agreements at the closing in order to ensure a smooth transition of operations and services for both employees and customers. Additional details regarding the transaction will be provided in HOS’s previously announced quarterly earnings announcement on July 31, 2013, and related conference call on August 1, 2013.


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