Zachry Holdings, the San Antonio company that oversees the construction and engineering projects and built the Hilton Palacio del Rio, has filed for bankruptcy citing issues with a natural gas project. The company and its 20 other subsidiaries voluntarily filed for Chapter 11 bankruptcy, according to documents filed in Texas bankruptcy court Tuesday and as first reported through the Express-News.
The petition identifies at least 30 debtors that have the largest unsecured claims against Zachry Holdings totaling $306,850,418. The largest claim, $133 million, comes from Sunbelt Rentals Inc.
Mohsin Y. Meghji, chief restructuring officer for Zachry Holdings, said in a separate declaration also filed in court Tuesday that the “result of financial distress” is caused by a major liquified natural gas (LNG) project in Sabine Pass awarded to Zachry Industrial in 2019 by Golden Pass LNG Terminal LLC, an entity owned by an entity 100% owned by affiliates of Exxon Mobil Corporation and Qatar Energy.
“As the project’s lead contractor, we have navigated significant challenges and disruptions stemming first from the COVID-19 pandemic and, more recently, international geopolitical issues,” says John B. Zachry, chairman and CEO, in a news release. “These unforeseen disruptions have resulted in significant financial strain while meeting targets and keeping the project appropriately staffed.”
Zachry says in the press release that he believes the company’s cash on hand and cash generated from other projects will provide enough liquidity to meet it’s obligations. Zachry Holdings also created a website providing information on the court process. The company says on its website that this will have minimal impact on its ongoing business and other clients.
Zachry Holdings is under Zachry Group, whose parent company was founded in 1924 by H.B. Zachry as H.B. Zachry Company, according to the website.
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