Tidewater Signs Bankruptcy Agreement | work boat

May 12, 2017

Tidewater signed a pre-packaged bankruptcy agreement. Photo by David Krapf

Tide Inc. has signed a Restructuring Support Agreement (RSA) with certain lenders and the company expects to file for Chapter 11 bankruptcy by May 17. The pre-packaged loan is backed by the company’s lenders who hold 60% of the principal amount of outstanding loans under the credit agreement. and the holders of 99% of the aggregate principal amount outstanding of the Tidewater Senior Notes.

Tidewater’s management is in talks with the New York Stock Exchange (NYSE) to maintain its current listing throughout the restructuring process. Although the company was recently notified by the NYSE that it has fallen below the continuous listing standard which requires listed companies to maintain an average closing price per share of at least $1 over a 30 consecutive trading days, Tidewater has notified the NYSE of its intent to heal and has until October 18 to regain compliance. After the restructuring is complete, it is expected that Tidewater will remain a publicly traded company and its common stock will continue to be listed on the New York Stock Exchange during and after the restructuring process.

As part of the agreement, existing common stock will be canceled and existing shareholders will receive common stock in the reorganized Tidewater representing 5% of the company, along with two sets of warrants.

In a prepared statement, Jeffrey Platt, President and CEO of Tidewater, said: “As we continue to navigate this unprecedented industry downturn, we are pleased to have reached an agreement that should enable Tidewater to significantly reduce its debt burden and provide sound finances We believe that the success of our restructuring will provide the liquidity and operational flexibility necessary for Tidewater to continue to operate at lower levels of activity until the “offshore drilling activity resumes and that more reasonable levels of vessel utilization and daily rates are restored. I would like to thank our employees and other stakeholders for their hard work and dedication as we complete the process of restructuring.”

Under the prepackaged plan:

  • Lenders under the Credit Agreement, holders of the Senior Notes and certain lessor parties under certain sale-leaseback agreements (the “General Unsecured Lenders”) will receive their pro rata share:
    $225 million in cash;
  • Common shares and, if applicable, warrants, to purchase common shares, representing 95% of the pro forma equity of the reorganized Tidewater (subject to dilution by a management incentive plan and the exercise of warrants subscription issued to existing shareholders under the pre-conditioned plan); and
    New 8% fixed rate secured notes due 2022 in an aggregate principal amount of $350 million.
  • Existing common stock of Tidewater will be canceled and existing common stockholders of the company will receive: common stock representing 5% of the pro forma common stock of reorganized Tidewater (subject to dilution by a management incentive plan and exercise of warrants issued to shareholders under the pre-packaged plan); Series A warrants to purchase 7.5% pro forma equity of reorganized Tidewater (six-year term, exercise price based on company equity value of approximately $1.71 billion ); and
    Series B warrants to purchase 7.5% pro forma equity (six year term, exercise price based on $2.02 billion equity value of the company).
  • Undisputed claims of other unsecured creditors such as customers, employees and vendors will be paid in full in the ordinary course of business (unless otherwise agreed between the parties).
  • The company’s Norwegian term loan facility, which is guaranteed by the company and other intended debtors, will remain in place during the Chapter 11 proceedings.

Under this plan, Tidewater expects to eliminate approximately $1.6 billion in principal of outstanding debt. All aspects of the Prepackaged Plan remain subject to bankruptcy court approval and satisfaction of the conditions set forth in the Prepackaged Plan.

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