Wednesday, June 3, 2009

"Somewhere in this pile of @&*% there's a pony"

There have been a number of inaccurate articles on this out there. Here's a 'short and sweet' best article yet on the bankruptcy.


"Austal, Maritime Administration weigh next step after Hawaii Superferry files Chapter 11"
Tuesday, June 02, 2009
Press-Register Business Reporter

Austal USA and the federal Maritime Administration, the entities that financed construction of two high-speed, passenger-vehicle ferries for Honolulu-based Hawaii Superferry Inc., are weighing their next moves after the company's bankruptcy filing over the weekend.

Hawaii Superferry has $136.8 million outstanding on two MARAD loans, and $22.9 million outstanding on a pair of loans from Austal, according to the filing. In addition, Austal agreed to defer a $1.6 million final payment that was due at delivery of the second vessel.

The company also owes Austal $78,198 in travel and labor costs, court documents say.

The first ferry operated in Hawaii for about a year amid environmental controversy, low volumes and numerous stops and starts.

Hawaii Superferry suspended the service in late March and sent the first ferry back to Mobile – specifically, to Atlantic Marine, the shipyard owned by John F. Lehman, a former Navy secretary and the venture's largest private investor.

That ferry was joined a few weeks later by her sister ship, which went straight from Austal to the shipyard only a few miles away.

Hawaii Superferry's plan was to charter one or both of the ferries, but that plan hasn't materialized as quickly as hoped, and the company and its parent, HSF Holding Inc., filed for Chapter 11 protection in Delaware on Saturday.

Hawaii Superferry listed assets between $1 million and $10 million and debt of $50 million to $100 million. The company said in a statement that a Hawaii Supreme Court ruling that caused the vessel to cease operations doomed the business.

Their future may indeed be with the military, industry watchers have said.

Austal late last year was awarded a potential $1.6 billion contract for so-called Joint High Speed Vessels, which are similar in design to the Hawaii Superferry. The first one is not scheduled for delivery until 2011.

Defense Secretary Robert Gates said in April that he intended to charter two fast ferries to transport troops and equipment, while up to 10 of the Joint High Speed Vessels are being built at Austal USA.

Upon news of the bankruptcy, industry analyst Tim Colton said on his blog that "now that HSF is broke, MARAD can take title to the two ships, pay off the bondholders and maybe charter them directly to the Navy."

Susan Clark, a MARAD spokeswoman in Washington, D.C., said the administration can indeed foreclose on the vessels once it assumes the debt or pays off the obligations.

However, she said, "it is too preliminary in the process to determine what other options may be available."

Austal officials, as well, said it's too early to say how they will proceed or what future role Austal might play.

Here was the full quote from Tim Colton's blog entry on this:


End of the HSF story. Read the report in the Honolulu Advertiser here. Read the filing here. Now that HSF is broke, MARAD can take title to the two ships, pay off the bondholders and maybe charter them directly to the Navy. Somewhere in this pile of @&*% there's a pony. May 31, 2009.

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