The cost to Matson could be as much as $15.4 million, and the ocean carrier will cease its molasses operations in Honolulu as part of the settlement.
Matson, Inc. has reached a settlement with the state of Hawaii to resolve all civil, criminal and administrative claims related to the discharge of molasses into Honolulu Harbor from a pipeline break in September 2013.
The ocean carrier said in a statement it will provide $11.4 to $15.4 million to Hawaii through a combination of cash, restoration and funding of environmental programs. Under the settlement, Matson will:
- Pay $5.9 million to the state as compensation for damaged coral and lost fish, as well as the state’s response and clean-up, investigative, administrative and legal costs;
- End molasses operations in Honolulu, remove a molasses tanks and risers at Sand Island terminal at an
estimated cost of between $5.5 million and $9.5 million;
- Regrow a coral nursery in a different location than Sand Island Terminal to help replace coral that had been damaged or destroyed;
- And support the International Union for Conservation of Nature World Conservation Congress, being hosted by Hawaii in 2016.
Matson will record an $11.4 million charge in its second quarter results, which will be released on August 4, 2015.
“Environmental stewardship is a core value in our company, so this event was a blow to all of us at Matson,” said Matt Cox, president and CEO. “We can’t take back what happened, but we’ve done our best to make it right.”
Matson separately announced Thursday it will sell $75 million worth of 30-year senior unsecured notes as part of a private placement agreement. The notes will have a weighted average life of approximately 13 years and will bear interest at a rate of 3.92 percent, payable semi-annually.
The notes are expected to be issued in September 2015, and the proceeds are expected to be used for general corporate purposes, which may include paying down the company’s revolving credit facility.
Matson also announced it has entered into amendments to its existing unsecured revolving credit facility and long-term private debt note agreements.
The liner carrier’s existing $375 million unsecured revolving credit facility with a syndicate of banks was increased to $400 million and extended for a new five-year term, maturing July 2020.