Waiver expires but Tidewater keeps talking

US-based offshore vessel owner Tidewater says its latest waiver of covenant default from its lenders and noteholders expired on 27 March 2017, without a renewal being sought by the company.

Jeff Platt, president and chief executive officer of the company, said: “Negotiations with our lenders and noteholders are progressing well, with a significant number of commercial points negotiated and, to our knowledge, resolved.

“However, work remains to resolve a small number of issues and to obtain the approval of our board of directors and final approval from the various financial institutions. In the meantime, while we press forward with our lender and noteholder groups in an effort to bring our negotiations to a successful conclusion, it is business as usual for the company.”

Since mid-2016 the company has not met the 3.0x minimum interest coverage ratio covenant in its credit and loan agreements, but has secured limited waivers for them.

The company has been engaged in lengthy talks with lenders and noteholders with respect to a potential restructuring of its debt arrangements. Its goal is to restructure in a way that will provide sufficient liquidity and a covenant package that will allow it to ride out the current market until conditions improve without a material risk of a future default.

However, the company says that under all three of the most likely scenarios – a restructuring of its indebtedness without filing for bankruptcy; a negotiated restructuring of the company’s indebtedness under the protection of Chapter 11; or Chapter 11 reorganisation in the absence of a negotiated restructuring – it is likely that shareholders’ ownership interests will, at a minimum, be “significantly diluted.”