Sea Star Holdings Inc., parent company for Seaborne Puerto Rico LLC, Seaborne Virgin Islands Inc. and affiliates, announced it has commenced a voluntary Chapter 11 bankruptcy reorganization proceeding to implement new financing and a sale of its assets to Silver Airways, LLC.
Seaborne will continue its business without interruption, including all existing flight operations in Puerto Rico, the U.S. Virgin Islands, and throughout the Caribbean, company executives said.
Tickets held by customers will continue to be valid and Seaborne will be taking bookings for future travel, as normal.
Seaborne also announced it has secured a new $4.2 million credit facility and entered into a purchase agreement — which is subject to court approval and potential overbids during the Chapter 11 proceeding — to sell most of its business and assets to Silver Airways.
This will facilitate a combination between Seaborne and Silver Airways, creating the industry’s leading regional carrier in the Caribbean, Florida, and the Bahamas, the carrier said.
“While the company’s business has enjoyed a remarkable recovery since the 2017 hurricanes, the financial stress caused during the recovery period coupled with legacy liabilities have made it necessary to seek reorganization protection,” said Ben Munson, acting CEO of Seaborne Airlines. “Our day to day operations will continue as normal, and this process will be in the best interests of all of our customers and stakeholders.”
Talk of a possible transaction between the two airlines surfaced in August 2017, when Florida-based Silver Airways is looking to expand its Caribbean footprint through a partnership with Seaborne, as this media outlet reported. The financial terms of the deal have not yet been revealed.
Seaborne has been doing business in Puerto Rico for the better part of the last six years, expanding operations in the Caribbean. In December 2013, it announced it would be relocating its regional headquarters from the U.S. Virgin Islands to the Luis Muñoz Marín International Airport in Carolina. From there, it launched direct routes to several points in the Dominican Republic, St. Maarten, Nevis and many other of the Lesser Antilles.
The carrier also forged code-sharing agreements with major airlines including United, Air Europa, Delta, and jetBlue. In September 2016, Seaborne announced it would be branding the iconic World Plaza Building in Hato Rey, where it has its corporate offices.
As part of the current proceedings, Seaborne said passenger service and safety will continue to be top priorities for the company.
Seaborne will operate normal flight schedules and conduct business as usual, honoring all ticketed reservations and rules of the company’s “Contract of Carriage.” The company will also maintain codeshare partnerships, as well as its “Seamiles” program.