Private equity firm Littlejohn & Co. LLC has made an equity investment in Gulf Coast Shipyard Group Inc., which manufactures marine vessels.
Under the brand name TY Offshore, Gulf Coast makes both ocean and inland marine vessels for commercial and military use. The Gulfport, Miss.-based company’s yachts division is called Trinity Yachts. Gulf Coast has a strong backlog of orders, says Edmund Feeley, managing director at Littlejohn.
The vessels include oil field-support, tank barges, offshore barges, tugs, oil-spill response and patrol vessels.
Littlejohn, headquartered in Greenwich, Conn., is a private equity and distressed securities firm that invests in middle market companies that are undergoing changes in capital structure, strategy, operations or growth. The firm is investing from Littlejohn Fund IV LP, which has more than $1.3 billion in capital commitments. Littlejohn’s current investments include CTI Foods, Henniges Automotive Inc. and Latham International Inc.
Shipping companies have hit a rough patch caused by an oversupply of vessels in the market, experts say. Two shipping companies, Excel Maritime Carriers Inc. (NYSE: EXM) and Seanergy Maritime Holdings Corp. (Nasdaq: SHIP) have landed on Mergers & Acquisitions Distressed Company Watch list.
Both of those shippers were working to restructure loans with their lenders after facing a drop in shipping rates caused by vessel oversupply.
Other shipping companies, including Overseas Shipholding Group Inc., General Maritime Corp. and Britannia Bulk Holdings Inc., sought bankruptcy protection.
Given the sectors’ troubles, it has become a place for distressed debt investors to put their money. Wilbur Ross, a distressed debt investor, has said he is raising a private equity fund to buy distressed shipping companies. Through WL Ross & Co. LLC, Ross was one of several private equity investors who helped fund Greenwich, Conn.-based Diamond S Shipping’s purchase of 30 tankers and charters in 2011. That deal won Mergers & Acquisition’s 2011 Deal of the Year award.
For more on distressed shipping companies, see “Finance Finesse: Marine Shippers Aim to Stay Afloat.”