American Queen Voyages End Operations, Say Hornblower Group

A river cruise boat and cherry blossoms
Updated Published

American Queen Voyages, a prominent river cruising firm in the United States, is halting its operations as its parent company, Hornblower Group, enters into a financial restructuring agreement.

The Hornblower Group has secured a pivotal investment deal with Strategic Value Partners, LLC, an international firm specializing in alternative investments. This arrangement will grant Strategic Value Partners a majority stake in Hornblower along with a significant equity contribution aimed at bolstering the financial standing of the company.

Crestview Partners will keep a substantial minority interest in Hornblower while taking over complete ownership of Journey Beyond, a top experiential travel company in Australia previously under Hornblower's portfolio.

Included in the deal is the provision of $121 million in fresh capital from funds managed by SVP and Crestview, which is expected to slash the company's overall indebtedness by about $720 million.

In line with the terms of this deal, Hornblower's struggling overnight cruise operation, American Queen Voyages, is set for divestment or shutdown. According to an announcement on the AQV website, the firm has stopped its operations and is in the process of refunding customer deposits.

American Queen Voyages communicated that, despite considerable efforts by its staff, crew, and partners, it has not been able to overcome the setbacks brought about by the pandemic. The sector of overnight cruising has been particularly hit by shifts in travel habits, making AQV's financial model unsustainable, leading to the decision to cease the business and cancel all forthcoming cruises.

Kevin Rabbitt, CEO of the Hornblower Group, mentioned that divesting AQV would enable the focus to shift towards the company's main activities in land and water experiences, which are currently performing well. “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,” Rabbitt said.

Hornblower has confirmed that aside from the American Queen Voyages segment, its other services will remain uninterrupted by this deal, ensuring the continuation of all scheduled services, trips, and other activities as planned.

To manage the divestiture or shutdown of American Queen Voyages, Hornblower and certain subsidiaries have begun a voluntary restructuring process under Chapter 11 of the U.S. Bankruptcy Code.

This process is anticipated to be completed in about four months, with support from a $300 million funding arrangement from Deutsche Bank Private Credit & Infrastructure to refinance the company's existing high-priority term loan, in addition to the $121 million in new capital from SVP-managed funds and Crestview.