Cruise Port Operator in Refinancing Discussions With Bondholders

Singapore freight forwarders – Star Concord
10-Feb-2021

Global Ports Holding, the largest independent cruise port operator, reports that it is in ongoing discussions with its financial stakeholders about refinancing $250 million in unsecured notes that are due in November 2021. Citing the impact of the COVID-19 pandemic on the cruise industry and the company’s liquidity, GPH has said that it does not expect to be able to repay the notes, including accrued and unpaid interest, when they come due in the fall.

Established in 2004, Global Ports Holding is a port operator with locations in the Caribbean, Mediterranean, Asia-Pacific regions, including extensive commercial port operations in Turkey and Montenegro. GPH operates 21 ports in 13 countries and before the pandemic reported that it provided services to more than 14 million passengers annually. The group’s commercial port operations include container, bulk, and general cargo handling.

The company has used the time during the suspension in the global cruise industry to continue to enhance its portfolio. The company recently signed new agreements with Port of Taranto, Italy and to operate and manage Valencia Cruise Port as well as proceeding with construction at the cruise port in Antigua.

“The spread of COVID-19 and the recent developments surrounding the global pandemic have had material negative impacts on all aspects of the Group’s business,” GHP writes in a regulatory filing. “The continued magnitude, duration, and speed of the global pandemic, and the group’s ability to estimate the impact of such an event on its future prospects, is uncertain. The group cannot predict when global cruise operations are likely to resume or when or if its cruise port operations will generate revenue at the levels observed before the onset of the pandemic.”

GPH reports that it has entered into discussions with certain key existing noteholders who collectively hold approximately 40 percent of the outstanding notes and have formed an ad hoc committee to evaluate the proposed refinancing. The entire $250 million principal amount of the notes remains outstanding and the company is due to make its next interest payment on May 14, 2021.

No agreement has been reached with the ad hoc committee. The noteholders made a counterproposal on February 4, which is currently under consideration.

Previously, GPH had said in mid-2020 that it could financially withstand up to two years of cruise shutdown. The company had also taken actions to reduce costs and staffing while noted that a number of its port operations generated revenues from non-cruise related business, including the handling of military vessels and mega-yachts. They estimated that individual ports have a survivability ranging between 16 and 36 months and highlighted that the commercial port operations had remained in line with projections.

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