The parent company of the ferry operator of Cataño, Vieques and Culebra files for bankruptcy – Metro Puerto Rico

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The Hornblower Group Declares Bankruptcy in Puerto Rico

The Hornblower Group, parent company of HMS Ferries, declared bankruptcy last Wednesday, just three years after being contracted by the government of Puerto Rico to operate and maintain the ferry system between San Juan and Cataño, as well as between Ceiba and the municipal islands.

The company, which was awarded a 23-year contract worth $750.8 million by the Public-Private Partnership Authority (AAPP) in November 2020, cited losses due to the Covid-19 pandemic as the reason for its financial woes.

Despite the bankruptcy filing, President of HMS-Ferris Puerto Rico, Matthew Miller, assured that operations will continue as usual and that there will be no impact on passengers or contractual commitments. He emphasized that the company will maintain the same level of exceptional service for residents and visitors.

However, Rick Newman, former chairman of Puerto Rico Fast Ferries (PRFF), raised concerns about the potential implications of the bankruptcy on the existing contract with Puerto Rico. He suggested that the bankruptcy court could annul the contract, potentially leading to the creation of a new Marine Transport Authority or a new privatization process.

In response, Executive Director of the AAPP, Mr. Fermín Fontanés, emphasized that the bankruptcy of the Hornblower Group does not affect the operations of HMS Ferries Puerto Rico. He reassured that the company will continue to fulfill its contractual obligations in Puerto Rico.

Amidst the bankruptcy announcement, the Hornblower Group also revealed plans to sell its American Queen Voyages night cruise line. The company hopes that the restructuring of its debt, totaling over $1 billion, under Chapter 11 of the United States Bankruptcy Code, will reduce its debt load significantly.

The selection of HMS Ferries in Puerto Rico has been a subject of controversy, with Newman alleging favoritism in the bidding process. However, the AAPP defended the selection, stating that it followed a rigorous bidding process lasting over two years.

As the Hornblower Group navigates through its financial challenges, the fate of the ferry operations in Puerto Rico remains uncertain. Residents and visitors alike will be watching closely to see how the situation unfolds.