Pasha will acquire four Jones Act containerships
Subject to regulatory and shareholder approval, the company is selling its Hawaii operations for US$141.5m to the Pasha Group, which will augment its existing roll-on/roll-off operations between the US mainland and Hawaii. Also going is Horizon’s Puerto Rico services, which are being sold to Matson for US$69.2m.
Pasha will acquire four Jones Act containerships, while Matson will gain three diesel -powered containerships and a fourth steam-powered box ship for dry-dock relief, plus terminal operations in Anchorage, Kodiak and Dutch Harbour. Horizon’s Alaska service consists of two weekly sailings from Tacoma to Anchorage and Kodiak, and a weekly sailing to Dutch Harbor.
George Pasha, president and CEO of the Pasha Group, said: “With this acquisition, we will supplement that service and provide an improved, more competitive offering on the Hawaii trade lane.”
Matt Cox, president and CEO of Matson, said: “The acquisition of Horizon’s Alaska operations is a rare opportunity to substantially grow our Jones Act business. [The acquisition] represents a natural geographic extension of our platform as a leader serving our customers in the Pacific.”
A financial restructuring in 2011 enabled Horizon to avert bankruptcy, but left it with a large debt burden most of which is due to repaid in 2016. The proceeds from the sale to Pasha will be used to reduce Horizon Line’s debt obligations prior to closing of the Matson transaction, at which time Matson will acquire all of the outstanding shares of Horizon Lines and repay the remaining debt outstanding at closing. The two transactions are valued at approximately $598 million on an enterprise value basis, putting the debt to be repaid by Matson at approximately $387m.
Separately, Horizon has decided to terminate its US-Puerto Rico operations by the end of this year, irrespective of whether or not the transactions with Pasha and Matson are completed.