Tidewater draws $600 million under revolver, seeks waiver from lenders

By Marisa Wong

Morgantown, W.Va., March 15 – Tidewater Inc. said it borrowed the full $600 million available under its revolving credit facility.

The funds are intended to be used for general corporate purposes and to enhance the company’s liquidity position and financial flexibility, according to a press release.

As previously disclosed in the company’s Dec. 31 Form 10-Q and discussed on its Feb. 3 quarterly earnings call, the current deterioration of the offshore energy market has had a corresponding negative effect on the company’s vessel revenue and other financial metrics.

The company said it is possible that in future quarters, and possibly as early as fiscal 2017, it may cease being in compliance with interest coverage ratios contained in some of its debt facilities and senior note indentures. Failure to meet the required interest coverage ratios would be an event of default under some of the company’s debt facilities.

The company said it is in talks with lenders and noteholders to obtain amendments or waivers of those covenants in advance of any default occurring.

Tidewater’s president and chief executive officer, Jeff Platt, commented in the press release, “Like the entire energy services industry, Tidewater continues to face challenges arising from the decline in the level of offshore oil and gas drilling and development activity around the world.

“Moreover, the uncertainty surrounding the future direction in oil and gas prices has resulted in our clients’ continued reduction in their capital budgets, spending and activity levels. Tidewater previously announced the suspension of its quarterly dividend and common stock repurchase program and the realignment of its operating structure. These and other steps have been taken to enhance liquidity, reduce costs and reduce capital expenditures, all to best position the company for an eventual industry recovery.”

“We are in compliance with all financial covenants and other terms of the revolving credit facility and our note indentures. This is a predicate to our being able to draw on the revolving credit facility,” Platt said.

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

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