Hornblower Group, a leading provider of land- and water-based experiences, has announced a major restructuring deal that will see it sell or shut down its overnight cruising business, American Queen Voyages (AQV), which has been struggling due to the pandemic.

The deal, which has the support of its investors, will also involve a change in ownership, a significant equity injection, and a reduction of debt for Hornblower Group. Funds managed by Strategic Value Partners (SVP), a global alternative investment firm, will acquire majority ownership of Hornblower and provide a substantial equity investment in the business.

Crestview Partners, a private equity firm, will retain a significant minority position in Hornblower and become the sole owner of Journey Beyond, a stand-alone operating unit of Hornblower and the leading experiential travel provider in Australia.

Hornblower will also receive $121 million in new-money financing from SVP-managed funds and Crestview, and the Company’s total debt will be reduced by approximately $720 million. These actions will strengthen Hornblower’s financial foundation and position it for a successful future.

To implement the deal and ensure an orderly sale or wind-down of AQV, Hornblower and certain of its affiliates have initiated a voluntary court-supervised and pre-arranged process under Chapter 11 of the U.S. Bankruptcy Code.

Hornblower expects to emerge from Chapter 11 in approximately four months. Hornblower has also received a commitment for $300 million in debtor-in-possession financing from Deutsche Bank Private Credit & Infrastructure to refinance its existing superpriority term loan. This new financing, combined with cash generated from ongoing operations, is expected to support the business during the court-supervised process.

Separately, Hornblower is commencing ancillary proceedings in Canada under the Companies’ Creditors Arrangement Act seeking recognition of the U.S. Chapter 11 proceedings in Canada.

The deal will enable Hornblower to focus on its core land- and water-based experiences businesses, which are delivering excellent results and serving thousands of guests every day.

“Building on our commitment to deliver amazing experiences for our guests, Hornblower has grown to become a global leader in world-class experiences and transportation,” said Kevin Rabbitt, Chief Executive Officer, Hornblower Group. “We have strong relationships with our government agency and business partners, and our core businesses are performing well with robust and growing demand.”

Mr. Rabbitt added, “The steps we are taking today will enable us to address AQV and strengthen our financial foundation as we continue serving our guests and commuters around the world. With the support of our financial stakeholders, we will continue to advance our business initiatives and drive growth. We thank the entire Hornblower team for their hard work and dedication, as well as our vendors and partners across our businesses for their continued support.”

David Geenberg, Co-Head of the North American Investment Team at SVP, said, “Hornblower is an outstanding company and a market leader in water-based transportation, tours and experiences, with complementary businesses and long-term contracts in attractive markets. With substantial growth potential in travel and tourism, we see significant opportunities ahead for Hornblower to further expand its leadership position. We look forward to working closely with the leadership team to help support the Company’s strong operating staff, excellent service and exceptional guest experiences as we usher in Hornblower’s next era of success.”

Brian Cassidy, President of Crestview, added, “This transaction is an important step in ensuring Hornblower’s future success, and we are enthusiastic about partnering with SVP on the Company’s next growth chapter post-COVID. We are also excited about being the sole owner of Journey Beyond, which has incredible growth opportunities ahead.”

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