Trico Marine Services ‘ U.S. companies and its Cayman Islands holding company filed for Chapter 11 bankruptcy in August.
The company’s foreign subsidiaries were not included in the filing and are expected to continue operating without interruption during the company’s restructuring. In conjunction with the filing, Trico received a commitment for up to $35 million in debtor-in-possession financing from Tennenbaum DIP Opportunity Fund and other funds managed by Tennenbaum Capital Partners .
Trico Marine’s fiscal second quarter filing on Aug. 16 questioned whether the company could survive. In the filing, the company said its “inability to meet past and current commitments, and uncertainties associated with the company’s ability to meet its other commitments as they come due, to comply with debt covenants or to repay its outstanding debt raises substantial doubts about the company’s ability to continue as a going concern.”
Trico was unable to make several interest payments on debt due in May, July, and August, and had to file for reorganization prior to Sept. 8 to avoid defaults.
“The combination of a sluggish economy, a highly leveraged balance sheet and imminent interest payments due has led us to determine that a court-supervised restructuring is the best course of action for the company and its stakeholders,” Richard A. Bachmann, the company’s chairman and interim CEO, said in a statement.
Bachmann said Trico “worked diligently to improve our liquidity, including the sale of $3 million of non-core assets, the sale of a North Sea-class vessel for $16 million and additional cost-cutting initiatives.”
The company said in its Aug. 16 filing that it would reduce its exposure to the slumping offshore towing and supply vessel business. In 2009, Trico sold eight supply boats, two platform supply vessels, and one anchor handling tug-supply vessel for about $73 million. Trico also halted its U.S. Gulf of Mexico supply vessel operations during 2009.
The company also sold three OSVs and one subsea platform vessel for $2.8 million during the first quarter. In the second quarter, Trico sold one AHTS and one OSV for $16.5 million. Trico also sold a PSV in April for $26 million, and five supply vessels for $3.8 million and another supply vessel for about $1 million in June.
In July, Trico moved to cancel contracts with Tebma Shipyards Ltd. in India for four new PSVs, which would reduce future capital expenditures to about $20 million for two remaining vessels. Trico and Tebma are currently in dispute over the contract.