I know they have been circling the bowl for quite awhile but it looks like they are finally going down.
Cal Dive International, Inc. (CDVI) (the “Company”) announced today that it has decided not to pay approximately $2.2 million in interest due January 15, 2015 on its 5.00% convertible senior notes due 2017 (the “Notes”). Under the terms of the indenture governing the Notes, the Company has a 30-day grace period during which it may elect to make the interest payment without being in default for non-payment.
The Company believes it is in the best interests of its debt and equity holders to continue to focus on actively addressing the Company’s debt and capital structure and intends during the 30-day grace period to continue discussions with its debt providers. If the Company does not make the interest payment before the grace period expires, the Trustee or the requisite holders of the Notes could declare the aggregate principal amount of the Notes, plus all unpaid interest and any other amounts due and owing on the Notes, immediately due and payable.
Additionally, as previously disclosed, the delisting of the Company’s common stock from trading on the New York Stock Exchange constituted a “Fundamental Change” under the Notes, and pursuant to the terms of the Notes and indenture governing the Notes, each note holder has the right to require the Company to purchase for cash any or all of the Notes held by the note holders at a price equal to 100% of the principal, plus accrued and unpaid interest. The Company provided the Fundamental Change Notice to the note holders on December 28, 2014, and has until February 2, 2015 to repurchase any notes that are tendered by note holders on or before January 30, 2015. The Company currently has no plans to repurchase Notes that are tendered, which will constitute a separate event of default under the indenture governing the Notes.
In pursuit of its efforts to deleverage the Company and improve its balance sheet and liquidity, the Company is continuing to pursue financing transactions, non-core asset sales and other strategic efforts that could provide the Company with additional liquidity and allow for the repayment, restructuring or refinancing of the Company’s first lien revolving credit facility and other funded debt. However, there is no assurance that an agreement on such a transaction will be reached in a timely manner. [B]Accordingly, the Company is also evaluating other, potentially less satisfactory measures, including seeking protection under the bankruptcy laws as it continues its efforts to restructure its business and capital structure.[/B]
So Cal Dive, in review, how could they have prevented this unfortunate fate? I am thinking if they had diversified earlier on they might not be in this position. Anyone think they’ll get bought up? or are their old vessels all destined for the scrap yard?