Company offering boat tours of Niagara Falls struggles under $1.2B debt, bankruptcy protection
CBC
The company known for its boat tours that drench millions of tourists in the thick mist of Niagara Falls each year is navigating rough financial waters.
Hornblower Group is under bankruptcy protection in the U.S., where it's based, and in Ontario where it runs boat tours on the Canadian side of Niagara Falls, according to documents filed in the Superior Court of Justice last month.
Hornblower also offers sightseeing cruises around Toronto Harbour and the Thousand Islands near Gananoque, Ont., as well as tours in Australia, the U.S. and major cities around the world.
Bankruptcy protection is a temporary measure given to companies in financial trouble that pauses any legal action by lenders looking to recoup their money.
In Hornblower's case, Chief Justice Geoffrey Morawetz approved the application on Feb. 21.
Now the company is embarking on a complicated restructuring process to overcome $1.2 billion of debt stemming from COVID-19 restrictions, which had a "profoundly adverse effect" on operations for several years, said a report filed by the court-appointed monitor.
Pandemic-related travel restrictions in 2020 immediately stopped its operations and triggered a liquidity crisis, the report said.
The good news for tourists flocking to the falls this year is that Hornblower's services won't be impacted, the company said in a news release.
Hornblower has a deal with Niagara Parks, giving it exclusive rights to provide poncho-wearing customers the chance to see the falls up close through 2043, which it plans to honour.
"Hornblower Canada sees steady demand and is a predictable source of long-term revenue," said the report.
Meanwhile, Hornblower is in the process of selling American Queen Voyages, an overnight cruising business that provided tours on U.S. rivers. It has also a new majority shareholder, investment firm Strategic Value Partners, said the news release.
"Our core businesses are performing well with robust and growing demand," said CEO Kevin Rabbitt in the news release.
Outside of American Queen Voyages, all services, booked trips and sightseeing cruises are continuing as planned, Hornblower said.
Hornblower's Australia unit, Journey Beyond, is not included in the bankruptcy protection order or court-supervised restructuring.
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