Trico Marine Services, Inc. (the "Company" or "Trico") today announced that its U.S. companies and its Cayman Islands holding company have filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code ("U.S. Bankruptcy Code") in the United States Bankruptcy Court for the District of Delaware (the "Court").
Aside from the Cayman Islands holding company, Trico's foreign subsidiaries were not included in the filing and will not be subject to the requirements of the U.S. Bankruptcy Code. Trico's U.S. and worldwide operations are expected to continue without interruption during the restructuring process.
Chairman of the Board of Directors, President and Chief Executive Officer, Richard A. Bachmann commented, "Over the last several months, we have worked diligently to improve our liquidity, including through 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. While we are beginning to see indications of improved operational performance, 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. While we are continuing discussions with our lenders, the Board decided to begin this process now in order to get the Company's restructuring underway without delay. We intend to move through this process as quickly as possible. Throughout the restructuring process, we will remain focused on operating our business worldwide while continuing our efforts to manage costs, strengthen our balance sheet and gain financial flexibility in order to position Trico as a strong and profitable competitor in our industry."
In conjunction with the filing, Trico has received a commitment for up to $35 million in debtor-in-possession (DIP) financing from Tennenbaum DIP Opportunity Fund and other funds managed by Tennenbaum Capital Partners, LLC (collectively, "Tennenbaum"), of which $10 million will represent incremental liquidity. The Company expects that, upon Court approval and satisfaction of other customary conditions, the DIP financing, combined with cash from the Company's ongoing operations, will provide funding to support the business. In addition, the Company anticipates that it will meet its obligations going forward to its employees, customers and suppliers.
Separately, the Company announced that Trico Shipping AS and its affiliates have reached an agreement in principle for $22 million in senior secured multi-draw term loan financing from certain holders of its 11 7/8% Senior Secured Notes (the "Trico Shipping Notes") representing approximately 80% of the Trico Shipping Notes and Tennenbaum. The closing of this financing arrangement is subject to obtaining required consents, as well as certain other closing conditions of Trico Shipping AS and its affiliates. This financing would be used to fund operating expenses and other working capital needs.
"We look forward to working together with all of our stakeholders to complete a successful financial restructuring," said Mr. Bachmann. "Our global operations are expected to continue without interruption throughout the restructuring process, and we remain committed to providing our customers with high quality service. We appreciate the ongoing dedication of all our employees, whose hard work is critical to our success and the future of the Company."
Trico will file a series of motions with the Court to ensure the continuation of normal operations, including requesting Court approval to continue paying employee wages and salaries and providing employee benefits without interruption and to continue use of its bank accounts and insurance policies. The Company expects the Court to approve these requests. During the Chapter 11 process, suppliers will be paid in full for all goods and services provided after the filing date as required by the U.S. Bankruptcy Code, and Trico has taken steps to ensure continued supply of goods and services to its customers.