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Savannah shipyard auctioned for US $18 million...

By IBI Magazine

The shipyard belonging to Global Ship Systems (GSS) of Savannah, Georgia, was auctioned yesterday for US$17.95 million, according to a story in the Savannah Morning News. One of Global Ship Systems' creditors, Drawbridge Special Opportunities Fund, had foreclosed on the property. It was sold to Drawbridge and Fortress Credit Corp, who created a "dummy" corporation in order to sell it on the open market.

"We're going to entertain offers from everybody in the world who's interested in having what could be a first-class shipyard in Savannah," Shalom Kohn of Sidley Austin LLP, a company that represents Fortress Investment Group, told the paper.

Global CEO Rob Creech told the paper that he will try to negotiate with Kohn's company in the hopes of buying the shipyard back. He said that he had previously made a US$18 million offer for it.

But Kohn told the paper that Creech made no real offer. "If they had a real bid, they could have stood up and announced $18 million here," Kohn said.

Creech had acquired the former Intermarine Savannah shipyard in June 2004 from Palmer Johnson owner Timur Mohamed for US$14 million. Creech and several partners established Global Ship Systems as a refit yard for yachts and other ships. But GSS had some financial difficulties early on after setting up operations, and according to the paper, had amassed a net loss of US$20.4 million by April 2007. Court filings show that by November 2007, GSS owned Drawbridge, its primary creditor, US$38 million.

"There's a shortage of shipyard capacity (in Savannah) and this will be a very valuable asset for someone who wants to buy it," said Kohn. He told the paper that companies interested in purchasing the property have already contacted him.

Documents filed late last month in the United States Bankruptcy Court for the Southern District of Georgia in Savannah show Creech had a US$17.5 million offer from Edison Chouest, a global offshore vessel service company, in July. But the deal fell through.

GSS laid off 130 workers and shut its doors in June.

(4 January 2008)