Tidewater Inc. (NYSE:TDW) has been constantly declining in the stock market, following the possibility of going bankrupt. The company had hinted at the possibility of this happening in its last press release, which has got the investors fleeing away from the stock. It should be noted here that the financial problems of Tidewater had been evident for quite some time. The company currently has a debt burden of over $2.04 billion, as reported in its financial statements for the 1H2016.
Recently, TDW had been making efforts to delay payments of these debts, through limited waiver extensions. As per the latest agreement with its lenders and note holders, the company was granted an extension of waivers, until November 11, 2016. Tidewater had stated that this had been done to provide relief from certain covenants. This was the second extension, obtained by the company, from its lenders. Moreover, TDW has also stated that given the recent market and industry conditions, the management believes that the debt terms would require further negotiations.
It was further noted that although progress was being made with these negotiations, but if they were to fail, the company would need to assess other options, including chapter 11. The management, however, reassured investors that the arrangements would be made in a way that is acceptable to all related parties. The last time TDW received an extension from its lenders was on September 16, 2016, until October 21, 2016. The extension had been granted keeping in view the company’s most recent Form 10-Q filing.
Initially, the limited waivers were due to be paid on September 18, 2016, prior to which the limited waivers of covenant non-compliance were extended. So far, the company believes that its negotiations with lenders and note holders have been constructive, but the principle open issues were yet to be resolved.
Tidewater Inc. (NYSE:TDW) had a trade volume of 6.78 million and gained 1.8% in terms of share price, to close at a share price of $1.7, at the end of October 25.