Heavyweights in at K-Sea

Two financial heavyweights have ploughed $100m into US tug and barge owner K-Sea Transportation.

KA First Reserve – a joint venture between First Reserve and Kayne Anderson – will grab rights to a 35% stake in the New York listed owner following the move.

Timothy Casey-led K-Sea will use the fresh cash to cut its debt pile, according to a statement.

With the aid of the KA First Reserve funds the shipowner’s debt will be trimmed to $279.2m by September.

First Reserve’s Gary Reaves and Kayne Anderson pair Kevin McCarthy and Jim Baker will join the K-Sea board as part of the pact.

Following the cash injection K-Sea has also re-jigged the terms of an existing loan.

It says the size of the pot has been scaled down from $175m to $115m, with the covenants also tweaked.

Casey said: "With our balance sheet recapitalisation behind us, we will be able to focus on operations, results and new opportunities.

“We remain convinced the domestic market for marine transportation of refined petroleum products will rebound significantly when demand recovers and single hull vessels leave the market permanently."

K-Sea turned in a loss of $66.67m in the three months to the end of June, overturning a profit of $2.68m a year ago.

Impairments and goodwill were responsible for $54.30m of the quarterly shortfall.

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