Tidewater Adopts Tax Benefits Preservation Plan to Protect Net Operating Loss Carryforwards and Foreign Tax Credits
April 14 2020 - 5:02PM
Business Wire
Tidewater Inc. (“the Company,”
NYSE: TDW), announced today that its Board of Directors (the
“Board”) has adopted a Tax Benefits Preservation Plan (the “Plan”)
as a measure to protect the Company’s existing net operating loss
carryforwards and foreign tax credits (“Tax Attributes”) and to
reduce its potential future tax liabilities. As of December 31,
2019, the Company had net operating loss carryforwards of
approximately $300 million and foreign tax credits of approximately
$388 million.
“Our Board adopted the Plan to
protect the Company’s substantial Tax Attributes from being
limited, which could have a negative impact on stockholder value,”
stated Tidewater President and Chief Executive Officer Quintin
Kneen. “Our Plan is consistent with actions taken by other
companies with significant Tax Attributes and has been structured
to protect our ability to maximize the use of our Tax Attributes to
offset future tax liabilities. The Plan has a limited life of three
years and will terminate if it is not ratified by the Company’s
stockholders at the 2020 annual meeting of
stockholders.”
Use of the company’s Tax
Attributes will be substantially limited if Tidewater experiences
an “ownership change” as defined in Section 382 of the Internal
Revenue Code (“Section 382”). In general, an ownership change
occurs if there is a cumulative change in a company’s ownership by
“5 percent stockholders” (as defined in Section 382) of more than
50 percentage points over the lowest percentage owned by such
stockholders at any time during the prior three years on a rolling
basis. The Company believes that as a result of prior ownership
changes, the Company’s Tax Attributes are at risk of being
substantially limited if additional ownership changes take place,
and this Plan is designed to address that risk.
While the Plan is in effect,
any person or group that acquires beneficial ownership of 4.99% or
more of the Company’s common stock then outstanding without
approval from the Board or without meeting certain customary
exceptions would be subject to significant dilution in their
ownership interest in the Company. Stockholders who currently own
4.99% or more of the Company’s outstanding common stock will not
trigger the Plan unless they acquire 0.5% or more additional shares
of common stock.
Pursuant to the Plan, one
right will be distributed to Tidewater stockholders for each share
of the Company’s common stock owned of record at the close of
business on April 24, 2020. The Board may redeem the rights in
whole, but not in part, for $0.001 per right (subject to
adjustment) at any time prior to the close of business on the tenth
business day after the first date of public announcement that any
person or group has triggered the Plan. The distribution of the
rights is not a taxable event for stockholders of the Company and
will not affect the Company’s financial condition or results of
operations (including earnings per share).
The rights will expire on the
earliest of (i) the close of business on April 13, 2023, (ii) the
final adjournment of the 2020 annual meeting if the stockholders
fail to ratify the Plan at such meeting, (iii) the time at which
the rights are redeemed, (iv) the time at which the rights are
exchanged, or (v) the time at which the Board determines that the
Tax Attributes are fully utilized, expired, no longer necessary, or
become limited under Section 382.
Additional details about the
Plan will be contained in a Form 8-K which the Company is filing
with the U.S. Securities and Exchange Commission.
Norton Rose Fulbright is
acting as legal counsel to the Company.
Tidewater owns and operates the largest fleet of Offshore
Support Vessels in the industry, with over 60 years of experience
supporting offshore energy exploration and production activities
worldwide. To learn more, visit www.tdw.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20200414005999/en/
Jason Stanley Vice President Investor Relations & Marketing
+1-713-470-5292 ir@tdw.com SOURCE: Tidewater Inc.
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