Tidewater files Chapter 11 to pursue restructuring

Tidewater Inc. (NYSE: TDW) and certain of its subsidiaries have filed voluntary petitions under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware to pursue a prepackaged plan of reorganization in accordance with its previously announced restructuring support agreement (RSA) with certain creditors to effectuate a comprehensive balance sheet restructuring.

As previously disclosed, on May 12, 2017, the Debtors began soliciting votes on the Prepackaged Plan from certain of the company's creditors. The lenders under the company's Fourth Amended and Restated Revolving Credit Agreement, the holders of the company's 2010 Notes, 2011 Notes, and 2013 Notes, as well as holders of sale leaseback claims that are anticipated to arise from the company's rejection in bankruptcy of certain sale leaseback agreements pertaining to marine vessels chartered by certain debtors, are treated as a single class for purposes of voting under the Prepackaged Plan.

As previously announced, Tidewater plans to reject certain sale-leaseback agreements for leased vessels currently in the company's fleet, and to limit the resulting rejection damages claims to approximately $131 million. However, the Sale Leaseback Parties dispute the amount of the rejection damages claims and a final resolution of the amount of such claims will be subject to litigation.  As a result, there is no certainty as to the final amount of sale-leaseback rejection damages claims that will be treated pursuant to the Prepackaged Plan. 

The Prepackaged Plan is supported by lenders holding approximately 60% of the outstanding principal amount of loans under the Credit Agreement and Noteholders holding 99% of the aggregate outstanding principal amount of the Senior Notes. Collectively, these supporting Lenders and Noteholders also constitute a majority in number of the holders of General Unsecured Claims.

No trustee has been appointed, and the debtors will continue to operate the business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and fully expect to continue existing operations and maintain staffing and equipment as normal throughout the court-supervised financial restructuring process.  Tidewater has filed a series of motions with the Bankruptcy Court to ensure a seamless transition into chapter 11 and has sought the approval of the Bankruptcy Court to continue paying prepetition employee wages and salaries and to provide employee benefits without interruption.  The Company continues to work closely with its suppliers and partners to ensure it meets ongoing obligations and business continues uninterrupted.

To support and effect the restructuring, the Debtors have filed applications to retain, among others, Weil, Gotshal & Manges LLP as restructuring counsel, Jones Walker LLP as corporate counsel, Lazard Frères & Co. as investment banker, and AlixPartners, LLP as restructuring advisor.

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