Horizon Lines could face bankruptcy gCaptain Total Views: 124 March 30, 2011 Image credit: Flickr user JAXPORT NEW YORK (Dow Jones)–Shares of Horizon Lines Inc. (HRZ) plunged as much as 48% Tuesday after the company said it expects not to be in compliance with its debt covenants this year, raising “substantial doubt” about its ability to continue as a going concern. The Charlotte, N.C., container-shipping and intermodal-transportation company said in a filing with the Securities and Exchange Commission late Monday that it expects to experience a covenant default related to its $330 million in convertible senior notes due 2012 as a result of a $45 million fine it is required to pay to resolve a Department of Justice probe into its domestic ocean shipping business. In February, Horizon agreed to plead guilty to charges of conspiring to fix rates and surcharges for marine freight transportation over a six-year period. Horizon further said in the filing that although it amended its senior credit facility this month, it expects to fall out of compliance with the revised covenants beginning in the third quarter. “We expect our financial results will be negatively impacted by softness in international rates, as well as by volatile fuel prices and by our ability to revise fuel surcharges accordingly,” the company said. Horizon’s accounting firm said that uncertainties regarding the company’s ability to remain in compliance with debt covenants “raise substantial doubt about [its] ability to continue as a going concern.” Horizon said it is working with its lenders to obtain amendments or waivers and is seeking refinancing sources to address its existing capital structure. It has retained Moelis & Co. as financial advisers to help it in its efforts. Later Tuesday, Standard & Poor’s Ratings Services said it cut the company’s long-term corporate credit rating three notches deeper into junk status to CCC because of the expected debt-covenant breach. The downgrade “also re