Onshore News: Superior Offshore shares sink after liquidity warning
Posted on 04.04.2008 - 16:00 EDT in GENERAL NEWS by Rons_ROV_Links
Shares of Superior Offshore International Inc. lost more than half their value on Wednesday, a day after the oilfield services provider warned it had extremely "limited liquidity" and requires substantial financing to continue business and pay obligations.
The shares of the company, which went public last April, hit an all time low of $1.20 in morning trade on Nasdaq, and are down more than 90 percent since their market debut.
The provider of subsea construction and commercial diving services said it has retained Tudor, Pickering, Holt & Co Securities Inc as its financial advisor to assist in exploring a range of alternatives, including a possible sale.
Superior said it was falling short of cash by about $7 million and its remaining balance in a credit facility was less than $1.8 million.
The Houston-based company said it would delay filing its annual report for 2007 and auditors may include a going concern opinion in the report if it is unable to obtain adequate additional or alternate financing.
In the event that the company is unable to obtain additional financing this month, it will need to sell additional assets or obtain capital from other sources to fund its operations and pay its obligations, Superior said in a statement.
Failure to obtain adequate financing or to raise funds from asset sales could impair the company's ability to meet its working capital requirements and ultimately require it to liquidate or initiate bankruptcy proceedings, it added.
Last month, Superior closed its fabrication operation and 80 employees there resigned or were terminated. It also fired 11 people on its corporate staff.
The company's CEO James Mermis resigned in January and Chief Financial Officer Roger Burks quit in February.
E. Donald Terry, who was an independent director, was named interim CEO, while Treasurer Thomas Daman replaced Burks as the CFO.
Superior shares were trading down $2.10 at $1.35 in afternoon trade on Nasdaq. © 2008 - Reuters