![COLUMN | And just like that... part two: Hornbeck and Helix come together; China cuts cables: US SECNAV Phelan fired! [Offshore Accounts]](http://media.assettype.com/bairdmaritime%2F2026-04-27%2Fp4zcdv96%2FUntitled.jpeg?w=480&auto=format%2Ccompress&fit=max)
Last week, we used the tacky Sex and the City sequel And Just Like That... as the hook for our weekly offshore analysis. With sample plotlines such as, “A mugger steals Seema's vintage Birkin bag. Charlotte and Lisa are flattered to be on a male student's MILF list at their children's school,” And Just Like That... seems a world away from the realities of the offshore industry.
However, the name of the series starring Sarah Jessica Parker perfectly encapsulates the opportunities and challenges from the biggest offshore vessel merger of the year.
Hold on to your Louis Vuitton clutches and your Jimmy Choo shoes, babes. Offshore’s Mr Big himself, Todd Hornbeck, is back in town… heading a US$3 billion publicly listed company on the New York Stock Exchange, China has cable cutting potential, and the civilian head of the US Navy has been dumped!
Mr Hornbeck has pulled off a coup, merging his company with publicly listed Helix Energy Solutions.
When we last heard from Hornbeck Offshore Services at the end of 2023, the company had just announced that it was planning to re-list on the New York Stock Exchange and had filed a 1,556-page registration statement with the Securities and Exchange Commission. That followed a Chapter Eleven bankruptcy filing in 2020 that left Hornbeck under the majority ownership of four distressed debt funds, with Ares Partners as the biggest single shareholder with a 42 per cent stake.
That attempt at a public listing, for reasons that were never explained, failed to occur, despite the company wracking up US$13 million in costs related to the aborted public offering as per the financial disclosures given to Helix’s shareholders last week.
A clue might lie in the disclosure that 2024 was a shockingly bad year for Hornbeck, as the company generated only US$16 million in free cash flow and refinanced US$75 million in paid-in-kind interest on its debts. To generate that little cash, the wheels must really have fallen off the operation. But Mr Hornbeck kept his job, and he and the management received US$9 million in stock-based compensation in 2024, on top of the US$19 million they received in 2023. They also received another US$7.7 million in 2025, clearly seeking to emulate Tidewater as the company with the most generous senior leadership payouts in offshore.
At the time of the postponed listing, Hornbeck owned a fleet of 75 ships and was suffering from sluggish utilisation. Just 32 of its total fleet of 54 offshore support vessels OSVs were reported on charter in the first nine months of 2023, and 21 of its platform supply vessels (PSVs) in that fleet were stacked at the date of the registration filing.
We noted that Tidewater, the industry leader, was achieving 90 per cent utilisation for its PSVs at that time, and Tidewater has consistently sold any laid-up ships, as it continually seeks to optimise its fleet and sell off older vessels in the absence of newbuildings.
After emerging from bankruptcy in 2020, Hornbeck seemed stuck, with a large fleet cold-stacked ships, a shareholder base of credit funds, and only eleven ships working internationally in 2023.
Today, Hornbeck owns a fleet of 71 vessels, including 58 PSVs and 13 multi-purpose support vessels (MPSVs) plus two newbuild MPSVs on order, which will be delivered in 2027 and will require funding to complete. This is where Helix’s cash will come in mightily handy.
Today, 21 Hornbeck vessels remain stacked and require reactivation, just as they did at the end of 2023; literally no progress has been made reactivating them in the last two years. The expense of reactivating such long-term, cold-stacked ships back into service will likely be astronomical, and much will depend on the condition in which they have been cared for during their years of cold stacking in Louisiana.
This is both an opportunity and a challenge for Hornbeck, as without investment to bring vessels back into service, it is hard to see how the company can grow its existing PSV business. It has improved its utilisation, with 46 of the 50 vessels not in cold stack now working, including 15 ships now working internationally, with eight in Brazil and five in Mexico.
Mexico remains a troubled market where state oil company Pemex has struggled to pay its vendors, a point made when Paratus Energy sold its five jackup rigs there to Borr Drilling.
But Hornbeck will become a listed company in the US shortly. As Baird Maritime's Jens Karsten reported last week, Hornbeck has agreed to merge with listed decommissioning and well services specialist Helix, “creating a premier integrated offshore services company,” as Helix informed its investors via this slide deck.
Helix will issue its stock to Hornbeck shareholders, who will take 55 per cent of the merged company, which will be renamed Hornbeck Offshore Services. Helix currently operates seven well intervention vessels, six subsea trenching systems and 39 work-class remotely operated vehicles, operated from six chartered in vessels.
The merged company will trade on the NYSE under the ticker symbol “HOS,” but the Helix brand will be retained for well intervention services.
The background to the deal is that in December 2025, Helix’s long-serving CEO, 71-year old Owen Kratz, informed the board of his intention to retire and that he would continue to serve as President and CEO only until the board has appointed a successor.
To say that Mr Kratz is long-serving understates his key role at Helix, and its predecessor company Cal Dive International, which he joined in 1984. He has a career longer than many of our readers have been alive. He served as Helix’s President from 1993, and then as CEO from April 1997 until October 2006. Before that, he had served as Chief Operating Officer from 1990 through 1997. He was also Chairman of the Board from May 1998 to July 2017.
To say that Mr Kratz has had a long leadership role at Helix is rather like saying Elon Musk has something of an ego, or that Usain Bolt was quite a fast runner.
Now Mr Kratz can retire, as Todd Hornbeck will serve as CEO of the combined entity and Helix’s existing chair William Transier will serve as Chairman.
So just like that, the merger with Hornbeck solves Helix’ succession problem and it solves Hornbeck’s listing problem without the need to blow another US$13 million, although due diligence, investment banking advisory fees, and legal charges associated with the merger will probably cost a similar amount.
The slideshow Helix issued contains some choice inferences when read in conjunction with Helix’s first quarter results filing, which was issued the day before the deal was announced.
As a private company, Hornbeck has been difficult to assess, as it doesn’t publish any data, but the Helix slideshow gives some pointers as to why this deal is important to Hornbeck. Helix has a market capitalisation of just under US$1.5 billion and so the combined company after the deal will likely be worth around US$3.3 billion, a little below the US$4.4 billion market capitalisation of Tidewater.
Helix reported that on March 31, it held US$501 million in cash on its balance sheet, offsetting the US$300 million of long-term debt. It said the new company would also have the same amount of cash, so Hornbeck’s shareholders will strip out its cash before the companies merge.
In 2025, Hornbeck generated US$142 million in cash flow from operations and paid US$40 million in interest, whereas Helix generated US$137 million in cash flow from its operations. As a comparison, Tidewater with its fleet of around 200 vessels achieved US$379 million of operational cash flow in 2025.
As we have seen in the big rig owner consolidations, mergers in offshore are about cost savings, reducing overhead, and reducing staff in duplicated functions to generate higher margins and lower expenses across the combined business. In the slideshow, surprise, Helix explicitly mentioned “US$75+ million of revenue and cost synergies annually expected within three years following close.”
This US$75+ million in savings will come from Helix taking Hornbeck vessels on-hire itself, the company claimed, thereby reducing reliance on those six third-party vessel charters from other owners. This upside also carries downside risk, as competitors of Helix like Oceaneering in the ROV and robotics segment will be reluctant to charter ships from Hornbeck, when that company is now a rival. This was a problem MMA Offshore faced when it bought Neptune Marine Services in Australia in 2019 and promptly alienated Shelf Subsea, once a customer but now a competitor.
Helix said that the savings will also come from support cost rationalisation and back-office redundancies, and from what the company described as “scaled procurement.” Good luck with that.
So, there will be job losses and there will no doubt be higher wages for Mr Hornbeck himself. Recall that the main driver of CEO pay is not return on capital or shareholder value creation; it is simply the size of the company a manager leads.
A bigger company invariably means a bigger paycheck for the CEO, especially for a listed company.
One of the disadvantages for any company closely aligned with a country’s military is that its attractiveness to foreign customers may vary depending on the attractiveness of the armed forces and government with which it works.
So, it was a surprise to see how closely aligned Hornbeck is with the US military, seemingly much more than Tidewater. Hornbeck holds long-term contracts with the Department of War, of up to ten years length. This may be a benefit, but it may also be a disadvantage outside the US during this time of, er, geopolitical tensions and some “controversial” policies.
The company provides vessel support for sea-based, X-band radar systems for the US Navy, submarine support training, sonar system support and transportation, autonomous vessel prototypes and also charters a stern landing vessel, which provides transportation and for mobile equipment of the US Marine Corps.
The slideshow boasted that Hornbeck has, “trusted relationships with key ranking members of military,” and that it enjoys, “high-level security clearances for personnel and facilities.” It said that its defence services business will provide, “a growing percentage of revenue,” in future.
Mr Kratz has guided Helix through 29 years as a publicly listed company. It never went bankrupt in that period, and, like Transocean and Seacor, it serviced its debt and kept its shareholders intact. This is in stark contrast to Mr Hornbeck, who steered Hornbeck into Chapter Eleven in 2020 with US$1.3 billion of debt.
Let’s hope, for the sake of Helix’s shareholders, that history doesn’t repeat itself. However, companies like Hornbeck that can provide subsea defence support are going to be increasingly important.
You can’t say you weren’t warned. Earlier this month, China announced a remarkable technological innovation: deep-sea data cable cutting capability at 3,500 metres of water depth. What could it possibly be used for in time of conflict?
We have already seen in the Baltic Sea how "dark fleet" vessels, including those crewed by Chinese nationals, have engaged in the crude practice of dragging vessel anchors for miles at a time to “accidentally” cut international data cables and power cables.
On Christmas Day in 2024, the Cook Islands-flagged shadow tanker Eagle S managed to sever four data cables and one interconnector cable in the Gulf of Finland between Estonia and Finland. The operators of the EstLink 2 electricity interconnector estimated the cost of repairs at about €60 million (US$69 million). The Chinese-flagged ship Yi Peng 3 also apparently cut two data cables in Baltic Sea in November 2024, also by dragging its anchor after departing the Russian port of Ust-Luga.
This now seems very crude. The Chinese state-owned research ship Haiyang Dizhi 2 has now tested a cable cutting electro-hydrostatic actuator in 3,500 metres of water, which would mean it could be used to cut just about any data cable in the world. The Chinese authorities described the trial as, “bridging the gap between laboratory development and operational engineering use, signalling readiness for broader deployment scenarios,” as per the alarming report in Subsea Cables online.
So, the first indication of a hostile move by China might be the internet going dark in the target country or territory and online services being interrupted. And just like that… we cannot take the security of deepwater cables for granted and subsea infrastructure will be on the frontline as it has been in the Baltic and is around Taiwan.
Last week, we highlighted that then US Secretary of the Navy, John Phelan, had some explaining to do over his involvement with the dead sex offender Jeffrey Epstein.
Surprise! On Wednesday, Mr Phelan was dramatically fired from his role as the most senior civilian official of the US Navy, with immediate effect.
It is not clear why he was fired and speculation varies between claims that this major donor to President Donald Trump was too slow at getting new ships built, that he had sought to build the new Trump-class battleships of the so-called “golden fleet” at foreign shipyards, not domestic ones, that he had had a personality clash with his boss at the Department of Defense/War, well-coiffured, former Fox News star Pete Hegseth, or that…. well, nobody really knows why, but it certainly wasn’t because of his plane rides with Jeffrey Epstein.
Navy Undersecretary Hung Cao, a navy veteran with over 25 years’ experience and two failed runs at political office but no known ties to Mr Epstein and no stash of private millions, is now the acting Secretary of the Navy.
We wish Mr Cao well.
