The following is an update to our blog published July 21, 2014. We’ve highlighted in red a passage pointing out that Horizon Lines, at some point, has plans to leave the Hawaii market. Our Managers don’t believe they’ll last long enough to sell it, unless it’s soon.
Debt-ridden Horizon Lines in talks to sell Puerto Rican assets to Crowley
Horizon Lines is reportedly in talks to sell off its facilities at the port of San Juan, as well as its ships and routes to and from Puerto Rico, to Jacksonville-based competitor Crowley Maritime.
Industry sources told Caribbean Business that Goldman Sachs is brokering an $80 million deal between Crowley and Horizon.
The talks for the San Juan port facilities and lines are reportedly part of Horizon’s plans to sell all three of its Jones Act routes — San Juan, Alaska and Hawaii — to different buyers for each of these markets.
Last year, Horizon posted more than $100 million in losses and the company has $700 million in debt, the company reported to the Securities and Exchange Commission.
Crowley is currently conflicting with the Puerto Rico Ports Authority over tax credits it wants to cover the estimated $100 million the company will need to invest in port facilities to receive two new ships, El Coquí and El Taíno, scheduled for delivery in the second quarter of 2017.
If Horizon does sell to Crowley, then Crowley could use Horizon’s docks without having to improve their own.
“If Crowley buys Horizon’s ports facilities, Crowley wouldn’t have to make the improvements. All they would have to do is move over to Horizon’s facilities at the dock,” one industry source said. “Crowley was expecting to get tax credits from Ports to make the improvements, but since the government is broke, the authority doesn't want to give Crowley tax credits for this investment.”
