Tidewater, one of the world’s largest offshore vessel owners, has entered into a debt restructuring support agreement with certain consenting creditors.
The U.S.-based vessel company has entered into the deal with lenders under its Fourth Amended and Restated Revolving Credit Agreement, dated as of June 21, 2013, and holders of Tidewater Senior Notes to put into force a proposed prepackaged plan of reorganization of the company.
The plan, that includes Tidewater and some of its subsidiaries filing for Chapter 11 bankruptcy by May 17, will, the company says, substantially deleverage its balance sheet and better position Tidewater “to weather the extended downturn in the offshore energy industry while maintaining the company’s position as a worldwide market leader in offshore vessel services.”
The prepackaged plan has the support of the company’s lenders holding 60% of the outstanding principal amount of loans under the credit agreement and holders of 99% of the aggregate outstanding principal amount of Tidewater’s Senior Notes. Tidewater expects that it will eliminate approximately $1.6 billion in principal of outstanding debt.
Under the plan, the consenting creditors will receive their pro rata share of $225 million of cash; common stock and, if applicable, warrants to purchase common stock, representing 95% of the pro forma common equity in reorganized Tidewater, and new 8% fixed rate secured notes due in 2022 in the aggregate principal amount of $350 million.
Furthermore, Tidewater’s existing shares of common stock will be cancelled, and the existing common stockholders of Tidewater will receive their pro rata share of common stock representing 5% of the pro forma common equity in reorganized Tidewater.
The existing shareholders will also be granted six year warrants to buy purchase additional shares of common stock of reorganized Tidewater.
These warrants will be issued in two tranches, with the first tranche (the“Series A Warrants”) being exercisable immediately, at an aggregate exercise price based upon an equity value of the Company of approximately $1.71 billion, and the second tranche (the “Series B Warrants”) being exercisable immediately, at an aggregate exercise price based upon an equity value of the Company of $2.02 billion, Tidewater said. The tranches will enable the existing shareholders to buy a number of shares equal to 15 percent (7.5% per tranche).