Tidewater seeks amendments to debt ahead of Sept. 18 waiver expiration

By Angela McDaniels

Tacoma, Wash., Aug. 9 – Tidewater Inc. is negotiating changes to its debt and may have to file for bankruptcy if it is unsuccessful, according to the company’s second-quarter 10-Q filing with the Securities and Exchange Commission.

The company is not in compliance with the 3x minimum interest coverage ratio covenant in the bank loan agreement for its revolving credit facility and term loan and the note agreement for its senior notes issued in 2013.

Because the company does not expect to meet the minimum interest coverage ratio requirement during fiscal 2017, the report of its independent registered public accounting firm that accompanied the audited consolidated financial statements for the fiscal year ended March 31 contained a going-concern warning.

The bank loan agreement requires that the company receive an unqualified audit opinion not subject to a going-concern or similar modification.

The company has obtained waivers of the minimum interest coverage ratio requirement and the unqualified audit opinion requirement through Sept. 18 and continues to discuss amendments to its debt arrangements with its principal lenders and noteholders.

Tidewater warned that these amendments may require it to make concessions such as providing collateral, repaying a portion of the revolver borrowings, accepting a reduction in total borrowing capacity under the revolver, paying a higher interest rate, issuing some form of equity or equity-linked compensation enhancement, paying down a portion of the notes or some combination thereof.

If any of the principal lenders or noteholders were to accelerate the company’s outstanding debt, all of its borrowings would become payable as a result of cross-default provisions. The company said it would not have enough liquidity to repay the accelerated debt and, if unable to reach an agreement to address the potential defaults would likely seek reorganization under Chapter 11.

Tidewater is a New Orleans-based provider of offshore service vessels to the energy industry.

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