Trinity Yachts’ New Orleans shipyard is for sale, as well as the Trinity Yachts name, brand and all of the designs and engineering to date.
The price is approximately $30 million, which includes more than 20 fully engineered designs in addition to the 48-acre yard and a partially built 168-foot yacht, but the final price will depend on what buyers are looking to acquire, Trinity Yachts COO Billy Smith told Trade Only Today. As of this morning, various parties were looking at the yard with different interests.
“[The price] fluctuates with, are they buying the entire shipyard, or are they buying the name, the designs, which include hull T-052 [under construction],” Smith said. “So all of that is to be decided between the parties.”
The news follows Trinity’s June 25 purchase by Harvey Shipyard Group, a company that specializes in providing vessels to service the offshore oil and gas industry. That company is keeping the Gulfport, Miss., Trinity yard to continue building commercial vessels for inland and offshore service.
“The new owners recognize their core business is servicing the offshore oil and gas industry, and they understand, while the shipyard is viable, the New Orleans yard represents more capacity than they’ll need for the foreseeable future,” Smith said. “Because of the yachts and the military boats we build there, the New Orleans shipyard is known as a very high-quality yard.
“It’s going to be very interesting to see how it plays out, but I’m very glad that the current owners decided to keep the operation intact,” Smith said.
“If they don’t get a fair value, they’ll continue to build and repair yachts. It’s not a distressed sale — they just feel it’s not their core business but would like to see a new owner keep the shipyard and the Trinity name going,” he added.
Harvey Gulf International Marine is the first company in the United States to operate a vessel on liquefied natural gas, which was built at the Gulfport shipyard that was formerly part of Trinity Yachts. The first vessel in this class was delivered this past March, another delivers next week, and there are four more of these 302-by-64-foot vessels under construction. When operating on LNG, these vessels exceed Tier 4 emissions requirements.
“We built the first vessels to operate on LNG in U.S. history, and we can make this technology available to the yacht market for those owners that wish to be very environmentally friendly.” Smith said.
Delays in environmental and regulatory approvals made the building of the first vessel difficult, Smith said. “The first boat was delayed over 54 weeks just on regulatory issues,” he said. “It’s always expensive to bring new technology to the market.”
In addition, gas prices are so low that the offshore drilling market hasn’t been as robust as in the past, hence the excess capacity with the New Orleans shipyard.
Trinity Yachts currently has under construction hull T-062 a 193-foot trideck motoryacht that delivers early next year, and the yard is also building the first in a new class of 95-foot pushboats that will have 3,000 hp. The company is ready to finish two stalled projects, hull T-052, a 168-foot trideck motoryacht and hull T-056, a 167-foot trideck motoryacht, according to the company website.
Atlanta-based Mensura Capital is tasked with organizing the transaction and has been speaking with various interested parties.
There has been interest from European service and repair yards that are keen to expand their ability to service superyachts in the United States. “There is no proper yacht yard to go in the U.S. for servicing 300-foot and above superyachts, and there are maybe one or two in Europe,” Smith said. “Since the controlling water depth to the yard is 30 feet and the shipyard has a half mile of deep-water frontage, a new owner can bring in dry docks and transform the shipyard into a world class superyacht repair facility.
“They may want to focus on service and repair, they may want to focus on new construction, as we have in the past, or a combination,” Smith said, “But that scenario will be decided by the entity that buys the company.”
The other scenario is a small group of investors buying the company, Smith said. “Five to 10 yacht owners or businessmen get together, who don’t want to buy a whole yacht yard but want to invest in it and get into the business, with each owning 10 percent,” he said. “There have been potential investors that have watched us from the sideline as we’ve struggled with the depression in the yacht business and with the difficulty getting this first LNG boat accepted by the U.S. Coast Guard. They realize this may represent a good opportunity to enter the business at a reduced risk.”
The key is that the shipyard is a turnkey operation, not a shuttered facility, Smith said.
There are about 100 employees at the yard. That’s down from 550 before Hurricane Katrina in 2005. The yard got up to about 350 workers following the storm with another 800 at the Gulfport facility.
That core group of 100 could easily be ramped back up with the rich labor pool in New Orleans, he said. The yard is now protected by a 17-foot levee that was built following Katrina.
There are also more than 20 designs that are fully engineered and have been built, which alone represents close to $50 million, Smith said.
“We’re trying to make it so the shipyard will remain active and that there will be a smooth transition in ownership,” he said. “The shipyard didn’t miss a beat on June 25 when it changed hands. We’re hoping we’ll be able to do the same thing one more time.”