Italian ferry operator Moby SpA filed for bankruptcy in a US court on January 14, the latest step in a long process of reorganization in Italy. Controlled by the Italian Onorato family, Moby worked to push through a reorganization plan that would allow the family to retain control of operations.
In June 2020, the company announced it would seek a court-guided reorganization citing pandemic pressures and travel restrictions on its operations. The company has a fleet of around 20 ferries sailing between Italy and the Mediterranean islands of Sardinia, Corsica and Elba. In 2015 Onoratos also acquired another Italian ferry company, Tirrenia, and recently launched a Baltic operation with St. Peter Line. The company with its destinations to popular tourist destinations in the Mediterranean has been heavily impacted by travel restrictions, while operations in the Baltic have been suspended in 2020 and 2021.
Moby and its subsidiary Compagnia Italiana di Navigazione sought to reach an agreement with bondholders and other creditors to restructure the company’s debt. Bondholders and banks would be liable for more than 500 million euros. Initial negotiations for refinancing have been complicated by an improvement in the company’s financial results as operations have recovered, particularly during the summer of 2021 when travel restrictions were eased and more people were traveling.
The case played out like a drama in court, with the Onorato family at times accusing a dissident group of creditors of seeking control of the business. The negotiations went through a series of back and forths. In the fall, the Onorato family said they secured the backing of a third of the bondholders for the reorganization, but in late fall the court froze the assets of the parent company valued at 20 million euros. in a dispute with Tirrenia.
Italian media recently suggested that a deal had been struck to split Moby into an operating company that would remain under the control of the Onorato family. Vessels and other assets as well as debt would be transferred to a new holding company, which would be recapitalized in part by selling some of the older vessels, along with a tug operation and other assets. Creditors were to cancel up to a third of the debt while planning to recapitalize the new company in exchange for an equity stake. Moby would operate the vessels under charter from the new company.
The Milan court has set a hearing on the draft reorganization plan for January 20. A deadline has been set for April. The filing in the United States was made under Chapter 15 of the Bankruptcy Act. It allows a foreign company to have access to US courts in connection with an existing foreign proceeding.
Moby continued to operate during the lengthy reorganization process while taking steps to continue modernizing its operations. In November 2021, the first of two new ferries was launched for the company in China. the Fancy Moby, due to enter service this year, is one of the largest cruise ferries in the world and will be the largest operating in the Mediterranean. With her sister ship, the Fancy Moby is being built to replace four older vessels. The new vessels are equipped with the possibility of switching from traditional fuel to LNG, should this become necessary at a later stage.