SeaRiver ends River Fleet operations
SeaRiver also announced the signing of an asset purchase agreement with Kirby Corporation (Kirby) for the sale of SeaRiver's owned River Fleet assets. Under the terms of the agreement, SeaRiver will sell 48 double hull inland tank barges and 7 inland towboats to Kirby for $35.4 million in cash. SeaRiver's two remaining towboats and two of its harbor tugs will also be sold, and in-chartered chartered equipment will be returned to its owners or assigned to service providers as a result of this announcement. Commercial contracts and other operating agreements will be initiated, as necessary. Additional details of the sales agreement and contract terms for transportation are confidential.
Kirby said it would also assume from SeaRiver the leases of 16 double hull inland tank barges. Kirby said that at closing it will enter into a contract to provide inland marine transportation services to SeaRiver, transporting petrochemicals, refined petroleum products and black oil products throughout the Gulf Intracoastal Waterway and the Mississippi River System.
Joe Pyne, Kirby's president and CEO, commented, "The SeaRiver acquisition is an excellent fit to our strategy of enhancing and growing our core inland marine operations through synergistic acquisitions, creating additional flexibility for our customers, improving our operational efficiencies and adding value for our shareholders. The SeaRiver tank barge fleet is a relatively young fleet, with an average age of 16 years. The acquisition is expected to be accretive to our 2003 earnings."
The asset purchase will be financed through Kirby's operating cash flow and available credit under Kirby's bank revolving credit agreement. The transaction is scheduled to close on January 14, 2003.
SeaRiver will close its inland operating offices in Baton Rouge, La. and Baytown, Texas. Related commercial activities coordinated out of SeaRiver's headquarters in Houston are not affected by this decision.
Fleet optimization and transportation efficiencies were quoted as the major factors in SeaRiver's decision. "This decision is the result of an ongoing evaluation of our operation," said SeaRiver President, Paul Revere. "We will be working closely with all affected employees and business partners to ensure that the transition is carried out in a smooth and orderly fashion. We will continue to focus our efforts to ensure that our customers receive safe, reliable and efficient marine transportation."
About 200 SeaRiver fleet and shoreside personnel will be affected by the discontinuation of the River Fleet operations. "In addition to severance benefits, SeaRiver will provide career placement assistance to help employees through the transition period," Revere added.
SeaRiver owns and operates U.S. flag oceangoing tankers and harbor tugs and provides a wide range of marine services