Item 1.01.
|
Entry into a Material Definitive Agreement.
|
Restructuring Support Agreement
On May 11, 2017, Tidewater Inc. (Tidewater or the Company) and certain of its subsidiaries (collectively with Tidewater, the
Debtors) entered into a Restructuring Support Agreement (the RSA) with certain of its creditors (collectively, the Consenting Creditors), specifically: (i) lenders holding 60% of the outstanding principal
amount of the loans under Tidewaters Fourth Amended and Restated Revolving Credit Agreement, dated as of June 21, 2013 (the Credit Agreement), between the Company as borrower, each of the guarantors named therein, Bank of
America, N.A., as administrative agent and the lenders party thereto (the Consenting Tidewater Lenders) and (ii) holders of 99% of the aggregate outstanding principal amount of Tidewaters (a) 3.90% Senior Notes, 2010-Series B
due December 30, 2017, 3.95% Senior Notes, 2010-Series C due December 30, 2017, 4.12% Senior Notes, 2010-Series D due December 30, 2018, 4.17% Senior Notes, 2010-Series E due December 30, 2018, 4.33% Senior Notes, 2010-Series F
due December 30, 2019, 4.51% Senior Notes, 2010-Series G due December 30, 2020, 4.56% Senior Notes, 2010-Series H due December 30, 2020, and 4.61% Senior Notes, 2010-Series I due December 30, 2022 (collectively, the 2010
Notes), (b) 4.06% Senior Notes, Series
2011-A
due March 31, 2019, 4.64% Senior Notes, Series
2011-B
due June 30, 2021, and 4.54% Senior Notes, Series
2011-C
due June 30, 2021 (collectively, the 2011 Notes), and (c) 4.26% Senior Notes, Series
2013-A
due November 16, 2020, 5.01% Senior Notes, Series
2013-B
due November 15, 2023, and 5.16% Senior Notes, Series
2013-C
due November 17, 2025 (collectively, the 2013 Notes, and together with the 2010 Notes
and the 2011 Notes, the Notes) (such holders, the Consenting Noteholders). The RSA contemplates that the Company will file a petition for voluntary relief under chapter 11 of title 11 of the United States Bankruptcy Code (the
Bankruptcy Code) in the United States Bankruptcy Court in the District of Delaware (the Bankruptcy Court) on or before May 17, 2017, seeking confirmation of the proposed Joint Prepackaged Chapter 11 Plan of
Reorganization of Tidewater Inc. and its Affiliated Debtors annexed to the RSA (as proposed, the Prepackaged Plan).
The RSA includes certain
covenants on the part of each of the Company and the Consenting Creditors, including, among other things, the agreement of each of the Consenting Creditors to: (i) vote or cause to be voted any claim it holds against the Debtors in favor of the
acceptance of the Prepackaged Plan and not (a) change or withdraw (or cause to be changed or withdrawn) any vote cast to accept the Prepackaged Plan, (b) object to, delay, impede, or take any action to interfere with, delay, or postpone
consummation of the transactions contemplated under the Prepackaged Plan, or (c) solicit, encourage, propose, file, support, participate in the formulation of or vote for any restructuring, sale of assets, merger, workout, or plan of
reorganization for the Debtors other than the Prepackaged Plan, and (ii) subject to certain exceptions, limit its ability to transfer any claims it holds.
Under the RSA, the Debtors have agreed, among other things, to: (i) act in good faith and use reasonable best efforts to support and complete
successfully the solicitation of votes to accept the Prepackaged Plan (the Solicitation) in accordance with the RSA; (ii) use reasonable best efforts to obtain any and all required regulatory and/or third party approvals of the
Debtors restructuring; (iii) take no actions materially inconsistent with the RSA, the Prepackaged Plan, or the confirmation and consummation of the Prepackaged Plan, unless Tidewaters board of directors or managers (or comparable
governing body), members, or partners, as applicable, determine, in good faith after consultation with outside counsel, that the failure to take such action is inconsistent with their fiduciary duties, upon which determination the Company shall
promptly notify the Consenting Creditors in accordance with the RSA; and (iv) do all things reasonably necessary and appropriate in furtherance of confirming the Prepackaged Plan and consummating the Debtors restructuring and the
transactions contemplated thereby, including, but not limited to, supporting and taking all actions that are necessary and appropriate to facilitate approval of the disclosure statement related to the Solicitation (the Disclosure
Statement), confirmation of the Prepackaged Plan, and consummation of the Debtors restructuring in accordance with the RSA.
The RSA also provides for termination by each party upon the occurrence of certain events, including, without
limitation, the failure of the Company to achieve certain milestones.
A copy of the RSA, including the Prepackaged Plan annexed thereto, is filed as
Exhibit 10.1 hereto and is incorporated herein by reference. The above summary description of the RSA is qualified in its entirety by the complete text of such exhibit.
Proposed Joint Prepackaged Chapter 11 Plan of Reorganization
The Company commenced the Solicitation on May 12, 2017 in accordance with the RSA. In connection with the commencement of the Solicitation, the Disclosure
Statement was distributed to certain creditors of the Company. Included in the Disclosure Statement is a copy of the proposed form of the Prepackaged Plan. The Prepackaged Plan is subject to the approval of the Bankruptcy Court and anticipates,
among other things, that on the effective date of the Prepackaged Plan (the Effective Date):
|
|
|
The lenders under the Credit Agreement, the holders of Notes, and the lessor parties (the Sale Leaseback Parties) to certain sale leaseback agreements holding claims thereunder (the General Unsecured
Creditors and the claims thereof, the General Unsecured Claims) will receive their pro rata share of (a) $225 million of cash, (b) subject to the limitations discussed below, common stock and, if applicable, warrants
(the Jones Act Warrants) to purchase common stock, representing 95% of the pro forma common equity in reorganized Tidewater (subject to dilution by a management incentive plan and the exercise of warrants issued to existing stockholders
under the Prepackaged Plan as described below); and (c) new 8% fixed rate secured notes due in 2022 in the aggregate principal amount of $350 million (the New Secured Notes).
|
The Company and the Sale Leaseback Parties are not in agreement with respect to the amount of claims of the Sale Leaseback Parties (the
Sale Leaseback Claims). Accordingly, on the Effective Date, a portion of the above consideration in cash, Jones Act Warrants, and New Secured Notes in an amount that the Company believes represents the maximum possible distributions
owing on account of the Sale Leaseback Claims will be withheld from the cash, Jones Act Warrants, and New Secured Notes distributed to allowed General Unsecured Claims on account of such disputed Sale Leaseback Claims as they are resolved. To the
extent the Sale Leaseback Claims are resolved for less than the amount withheld, the remainder will be distributed to holders of allowed General Unsecured Claims pro rata.
To assure the continuing ability of certain vessels owned by the Companys subsidiaries to engage in U.S. coastwise trade, the number of
shares of the Companys common stock that would otherwise be issuable to the allowed General Unsecured Creditors may be adjusted to assure that the foreign ownership limitations of the United States Jones Act are not exceeded. The Jones Act
requires any corporation that engages in coastwise trade be a U.S. citizen within the meaning of that law, which requires, among other things, that the aggregate ownership of common stock by
non-U.S.
citizens
within the meaning of the Jones Act be not more than 25% of its outstanding common stock. The Prepackaged Plan requires that, at the time Tidewater emerges from bankruptcy, not more than 22% of the common stock will be held by
non-U.S.
citizens. To that end, the Prepackaged Plan provides for the issuance of a combination of common stock of reorganized Tidewater and the Jones Act Warrants to purchase common stock of reorganized Tidewater
on a pro rata basis to any
non-U.S.
citizen among the allowed General Unsecured Creditors whose ownership of common stock, when combined with the shares to be issued to
2
existing Tidewater stockholders that are
non-U.S.
citizens, would otherwise cause the 22% threshold to be exceeded. The Jones Act Warrants will not grant
the holder thereof any voting or control rights or dividend rights, or contain any negative covenants restricting the operation of the Companys business. Generally, the Jones Act Warrants will be exercisable immediately at a nominal exercise
price, subject to restrictions contained in the Companys new certificate of incorporation designed to assure the Companys continuing eligibility to engage in coastwise trade under the Jones Act that prohibit the exercise of such warrants
where such exercise would cause the total number of shares held by
non-U.S.
citizens to exceed 24%. Tidewater will establish, under its charter and through DTC, appropriate measures to assure compliance with
these ownership limitations.
|
|
|
The Companys existing shares of common stock will be cancelled as of the Effective Date. 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 (subject to dilution by a management incentive plan and the exercise of warrants issued to existing stockholders under the Prepackaged Plan) and six year warrants to 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. The Series A Warrants will be
exercisable for a number of shares equal to 7.5% of the sum of (i) the total outstanding shares of common stock after completion of the transactions contemplated by the Prepackaged Plan, and (ii) any shares issuable upon exercise of the
Jones Act Warrants and the Series A Warrants, while the Series B Warrants will be exercisable for a number of shares equal to 7.5% of the sum of (x) the total outstanding shares of common stock after completion of the transactions contemplated
by the Prepackaged Plan, and (y) any shares issuable upon the exercise of the Jones Act Warrants, the Series A Warrants, and Series B Warrants. Like the Jones Act Warrants, the Series A Warrants and the Series B Warrants will not grant the
holder thereof any voting or control rights or dividend rights, or contain any negative covenants restricting the operation of the Companys business and will be subject to the restrictions in the Companys new certificate of incorporation
described above that prohibit the exercise of such warrants where such exercise would cause the total number of shares held by
non-U.S.
citizens to exceed 24%.
|
|
|
|
The undisputed claims of other unsecured creditors such as customers, employees, and vendors, will be paid in full in the ordinary course of business (except as otherwise agreed among the parties).
|
The information contained in the RSA, including the Prepackaged Plan, the Disclosure Statement, and this Form
8-K
are
for informational purposes only and do not constitute an offer to buy, nor a solicitation of an offer to sell, any securities of the Company, nor do they constitute a solicitation of consent from any persons with respect to the transactions
contemplated hereby and thereby. While we expect the restructuring will take place in accordance with the Prepackaged Plan, there can be no assurance that the Company will be successful in completing a restructuring. Stockholders are urged to read
the disclosure materials, including the RSA, the Disclosure Statement, and the Prepackaged Plan, for additional important information regarding the restructuring.
Troms Forbearance Agreement and Amendment to the Troms Facility Agreement
As previously disclosed, on May 25, 2012, the Debtors, as guarantors, entered into a Term Loan Facility Agreement as amended and restated (the Troms
Facility Agreement) with Troms Offshore Supply AS,
3
as borrower (the Troms Borrower), Eksportkreditt Norge AS and Kommunal Landspensjonskasse Gjensidig Forsikringsselskap as lenders (the Troms Lenders), and certain bank
guarantors party thereto (together with the Troms Lenders, the Troms Finance Parties). On May 11, 2017, the Debtors, the Troms Borrower, the Troms Finance Parties, the Additional Obligors (as defined herein) and Garantiinstituttet
for Eksportkreditt and DNB Capital LLC as additional lenders (the Additional Lenders), entered into an Amendment and Restatement Agreement No. 4 (the Fourth Amendment), pursuant to which, among other things, (a) the
Additional Lenders agreed to make available to the Troms Borrower a new term loan for $5,068,863, (b) Troms Offshore Fleet Holding AS, Troms Offshore Fleet 1 AS, Troms Offshore Fleet 2 AS, Troms Offshore Fleet 3 AS, Troms Offshore Fleet 4 AS, and JB
Holding Company BV, each an indirect, wholly-owned foreign subsidiary of the Company, agreed to serve as additional obligors of the obligations thereunder (collectively, the Additional Obligors), and (c) the Debtors, the Troms
Borrower, the Additional Obligors, the Troms Finance Parties, and the Additional Lenders agreed to amend and restate the Troms Facility Agreement (the Amended and Restated Troms Facility Agreement). The Fourth Amendment will become
effective on the Effective Date.
A copy of the Fourth Amendment, including the Amended and Restated Term Loan Facility Agreement annexed thereto, is
filed as Exhibit 10.2 hereto and is incorporated herein by reference. The above description is qualified in its entirety by the complete text of such exhibit.
On May 11, 2017, the Debtors entered into a Forbearance Agreement (the Forbearance Agreement) with the Troms Borrower, the Additional
Obligors, DNB Bank ASA, New York Branch, as agent on behalf of the Troms Finance Parties, and the Norwegian Export Credit Guarantee Agency, as bank guarantor, which Forbearance Agreement relates to the Troms Facility Agreement.
Pursuant to the Forbearance Agreement, among other provisions, the Troms Finance Parties have agreed that during the Forbearance Period (as defined below),
subject to certain conditions precedent and continuing conditions, they will not enforce, or otherwise take any action to direct enforcement of, any of the rights and remedies available to the Finance Parties under the Troms Facility Agreement or
otherwise, including, without limitation, any action to accelerate, or join in any request for acceleration of, the Troms Facility Agreement due to the Company commencing voluntary cases under chapter 11 of the Bankruptcy Code as contemplated by the
RSA and the continued existence of certain specified events of default. The Forbearance Period began on May 11, 2017 and ends on the earliest of (i) August 30, 2017, (ii) the occurrence of any event of default under the Troms Facility
Agreement, other than certain specified events of default, and (iii) the termination of the RSA as a result of the occurrence of any (a) Creditor Termination Event (as defined in the RSA), (b) Tidewater Termination Event (as defined in the
RSA), or (c) other termination of the RSA under its terms.
A copy of the Forbearance Agreement is filed as Exhibit 10.3 hereto and is incorporated
herein by reference. The above description of the Forbearance Agreement is qualified in its entirety by the complete text of such exhibit.