tidewater guidery tide ahts

Tidewater to File for Chapter 11 Bankruptcy

Total Views: 23
May 12, 2017

File photo

New Orleans-based oil services company Tidewater Inc. has entered into a prepackaged restructuring agreement with certain lenders that will require the company to file for Chapter 11 bankruptcy.

On Friday, Tidewater announced the restructuring and said it expects the pre-packaged plan to substantially deleverage its balance sheet and better position the company as it continues to weather the extended downturn in the offshore energy industry. As part of the deal, the company and certain of its subsidiaries are expected to file chapter 11 cases in Delaware by May 17, 2017.

It said the plan is expected to eliminate approximately $1.6 billion in principal of Tidewater’s outstanding debt.

During the restructuring, the company will continue to operate as normal in an effort to maintain its position in the worldwide offshore vessel services market, with sufficient funds to pay employees and vendors. 

Tidewater, with more than 300 vessels, is one of the biggest OSV operators in the offshore oil and gas industry.

“As we continue to navigate this unprecedented industry downturn, we are pleased that we have reached an agreement which should allow Tidewater to significantly reduce its debt burden and provide sound financial footing for the company’s future,” said Jeffrey Platt, President and Chief Executive Officer of Tidewater. “We believe that successful completion of our restructuring will provide the necessary liquidity and operational flexibility for Tidewater to continue to operate at lower levels of activity until offshore drilling activity recovers and more reasonable levels of vessel utilization and day rates are restored. I want to thank our employees and other stakeholders for their continued hard work and dedication as we complete the restructuring process.”

For the past several months Tidewater has been in the process of negotiating with its principal lenders and noteholders to amend the company’s various debt arrangements in order to obtain relief from certain covenants. During the negotiations, Tidewater had sought and received several limited waivers for non-compliance with the covenants preventing the company from defaulting on its loans, which would force it to consider other options including Chapter 11 bankruptcy protection. In March, however, Tidewater allowed the last of the limited waiver to expire despite a not yet reaching a deal.

In its announcement on Friday, Tidawater said The Prepackaged Plan has the support of the its lenders holding 60% of the outstanding principal amount of loans under the Credit Agreement dated as of June 21, 2013 and holders of 99% of the aggregate outstanding principal amount of Tidewater’s Senior Notes. The company expects to have sufficient liquidity to operate its business throughout the restructuring process, which will include paying employees and vendors. 

Tidawater said it has also been in discussions with the New York Stock Exchange regarding maintaining its current listing throughout the restructuring process. Recently it was warned by the NYSE that its share price had fallen below the required minimum for listed companies to maintain. Tidawater said it is working to meet the requirement and it expects to remain a publicly-traded company during and after the restructuring process.

The plan also includes measures to maintain its Jones Act status with respect to certain vessels engaging in U.S. coastwise trade.

Details of Tidewater Inc.’s restructuring plan are detailed on its website.


Back to Main