The Hornblower Group, the company that runs the Alcatraz City Cruise tour, has filed for bankruptcy Wednesday following the financial turmoil of the COVID-19 pandemic.
The company takes an average of 1.7 million guests annually on the Alcatraz cruise, according to the Hornblower Group’s website.
Alcatraz was a former military fort that was converted into a notorious prison, where famous convicts like Al Capone and Robert Stroud, the “Birdman of Alcatraz,” were incarcerated. The prison was shut down in the 1960s, according to the Alcatraz City Cruises’ website.
Q7. Many who visit Alcatraz Island are surprised to learn of the island’s history beyond the infamous federal prison era. What is an unexpected story that you learned about a park?#ParkChat
📷: NPS pic.twitter.com/Ch7sKD83wz— Alcatraz Island (@AlcatrazIsland) October 27, 2022
In 2019, Hornblower Group was given a 15-year National Park Service contract to operate the Alcatraz route, The San Francisco Standard reported.
In a sworn statement regarding the Chapter 11 bankruptcy filing, Chief Restructuring Officer Jonathan Hickman cited increased interest rates and struggles from the COVID-19 pandemic as reasons for the filing, The Wall Street Journal reported. The company’s annual interest expenses reportedly rose from $62 million in 2021 to $115 million.
The company said in legal filings that its asset-to-debt ratio was at $1 billion to $1.2 billion, according to The San Francisco Chronicler. (RELATED: Major Airline Explores Refinancing Options After Biden Admin Suit)
The COVID-19 restrictions caused the company’s revenue to drop from $690 million in 2019 to $175 million in 2020, Hickman said in a declaration, according to the outlet.
The investment firm Strategic Value Partners will acquire a majority stake in the company, adding $121 million of capital into the company, and reducing its debt by $720 million, as part of the restructuring plan, the Standard reported.
The company estimates that the length of bankruptcy will be around four months, according to the outlet.
Hornblower Group CEO Kevin Rabbitt said that the Bay area operations would not be affected by the bankruptcy, the outlet reported.
“We look forward to welcoming guests on Alcatraz City Cruises and our City Cruises SF dining operations well into the future,” Rabbitt said, according to the Standard.