Cal Dive going down the tubes

I know they have been circling the bowl for quite awhile but it looks like they are finally going down.

http://finance.yahoo.com/news/cal-dive-announces-decision-not-022500146.html

HOUSTON–(BUSINESS WIRE)–

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?

[QUOTE=SomeGuy;152148]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?[/QUOTE]

they should have invested in new vessels and equipment in the wake of the damage caused by Katrina in 2005 but they took all their profits and stayed the course with a fleet of utter garbage while the competitors brought in far newer vessels with much better capabilities.

What amazes me is that Helix who’s roots come from Cal-Dive would allow them to tank like this? Doesn’t Helix still hold shares in Cal-Dive?

[QUOTE=c.captain;152164]

What amazes me is that Helix who’s roots come from Cal-Dive would allow them to tank like this? Doesn’t Helix still hold shares in Cal-Dive?[/QUOTE]

Not that I am aware of.

[QUOTE=SomeGuy;152148]I know they have been circling the bowl for quite awhile but it looks like they are finally going down.

http://finance.yahoo.com/news/cal-dive-announces-decision-not-022500146.html

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?[/QUOTE]
They sold off all their sallow water / surface diving side last year to some private investors. I don’t see anyone working in the Gulf of Mexico buying what they got left.

[QUOTE=CaptRob1;152208]Not that I am aware of.[/QUOTE]

ok…I had only heard that Helix kept and interest in Cal-Dive after they were spun off

interesting though how the child of the parent would allow that parent to whither so…like they simply washed their hands of diving and subsea in the GoM entirely?

I would expect that with continued losses now for many years that Cal-Dive is not simply out of cash with little chance to be able to borrow more to cover accounts payable in the short term. They only thing that could save them from their creditors would be if they have an orderbook to show future earnings that might bring in enough this summer to then get the payments going back to the lenders. However, with Cal-Dive’s old equipment, I cannot see them being the company of choice for the operators and with the downturn slowing or stopping development or maintenance projects on the shelf would pretty much be the end of the company which is too bad but to me they are in the same bed as McDermott. Once the go to company but one who refused to update equipment while the competitors brought in all newest generation vessels and lost their market share bit by bit.

[QUOTE=c.captain;152250]I would expect that with continued losses now for many years that Cal-Dive is not simply out of cash with little chance to be able to borrow more to cover accounts payable in the short term. They only thing that could save them from their creditors would be if they have an orderbook to show future earnings that might bring in enough this summer to then get the payments going back to the lenders. However, with Cal-Dive’s old equipment, I cannot see them being the company of choice for the operators and with the downturn slowing or stopping development or maintenance projects on the shelf would pretty much be the end of the company which is too bad but to me they are in the same bed as McDermott. Once the go to company but one who refused to update equipment while the competitors brought in all newest generation vessels and lost their market share bit by bit.[/QUOTE]

C. Captain, you are thinking like an old guy that thinks corporations exist to grow a business and take care of the stockholders. That sort of thinking went out the window years ago. Corporations exist to enrich the directors and officers as soon as possible so they can retire, buy new yachts and leave the little stockholders with nothing but a steaming pile of crap. They use the assets, boats, port facilities etc, as collateral for loans, vote themselves stock for free as a director or officer, sell the stock extracting that same cash they borrowed and make themselves rich. On top of that they and their institutional investors can create another corporation and hedge their money by betting that the company will fail, it is called hedging and is done thru an outfit such as AIG which is basically like a casino for the 1%. You remember AIG? It was the casino that was bailed out by YOU the taxpayer so that the 1% would not lose too much money and put the world in chaos. Privatized gains and socialized losses it is called.There is not any desire by these assholes to build a sustaining business only a desire to get rich. Back in the old days when you were growing up this would have been considered illegal and has always been considered immoral but now it is just “business”.There are no more unions to demand their share of the pie [ they made sure of that long ago] it is just one pie consumed by greedy bastards. These businesses, hedge funds and major banks own the police, SEC etc so you have no recourse as a stockholder. You pay for their losses going and coming. Sorry, the days of thinking a US corporation had to take care of the long term interests of the stockholder are long gone. The directors and the officers are now in the business of money extraction not money creation.
If you think anything is going to change you should keep in mind that 90% of congressmen just got reelected, which says something about the intelligence of the average voter.
Welcome to the world of the US of the 1%.

company managers and directors pocketing cash and leaving a company to wither and die is nothing new to my ears…we all know that business in the US is corrupt as the day is long

I won’t say if this happened at Cal-Dive or McDermott or if both were simply the victims of shortsighted thinking by management and an unwillingness to invest in the right equipment. Tidewater was no different. All big dogs in their day but their day is past.

[QUOTE=c.captain;152267]company managers and directors pocketing cash and leaving a company to wither and die is nothing new to my ears…we all know that business in the US is corrupt as the day is long

I won’t say if this happened at Cal-Dive or McDermott or if both were simply the victims of shortsighted thinking by management and an unwillingness to invest in the right equipment. Tidewater was no different. All big dogs in their day but their day is past.[/QUOTE]\

If you look at Caldives cash, debt and assets before Helix and then after helix you can see why they are in this position today as spelled out above.

[QUOTE=powerabout;152282]If you look at Caldives cash, debt and assets before Helix and then after helix you can see why they are in this position today as spelled out above.[/QUOTE]

please explain…was Cal-Dive brought to its knees by it being suctioned of all cash by management or from simple neglect?

certainly after all the work they received post Katrina, they must have been rolling in money and we certainly know that they did not invest any of that back into a fleet renewal program. To stay the course with UNCLE JOHN, KESTREL and MYSTIC VIKING along with all the non DP vessels and barges as they did was to in effect cut their own throat in the face of competition from companies with new or almost new vessels and equipment. Anywhere in maritime, equipment and vessels have a finite commercial lifespan. You can keep a vessel alive on life support but there comes a time when the body is too old to be able to play the game as a competitor. Just that simple.

I’m not entirely sure of the origins nor all the happenings involving the M/V Dove (currently owned by Chouest) but I want to say I vaguely remember looking at vessel layouts and sketches when I walked through it with the name Cal-Dive Dove. Correct me if I’m wrong, but I could have sworn that was the case. Anyone have any knowledge or ideas on that matter?

[QUOTE=Rain Wizard;152305]I’m not entirely sure of the origins nor all the happenings involving the M/V Dove (currently owned by Chouest) but I want to say I vaguely remember looking at vessel layouts and sketches when I walked through it with the name Cal-Dive Dove. Correct me if I’m wrong, but I could have sworn that was the case. Anyone have any knowledge or ideas on that matter?[/QUOTE]

The DOVE was a very early concept of a heavy subsea construction vessel built in 1998 or so, by Halter for a JV between Aker and Hvide/Seabulk which then become Seacor. Soon after delivery, Cal-Dive bought Seacor’s share of the vessel. How it ended up owned and managed by ECO as the tender for that idiotic OSX is a bit of a mystery. I was involved with some others (anyone here remember Dave Bengtsson and Mike Walker?) who were trying to bid on the tender put out by Aker at the time and we were proposing to convert the never used Tacoma Boat built incineratorship APOLLO II to be converted to the role which was a much larger hull and had more capability. In all honestly, I cannot recall at all why that ship wasn’t chosen other than the principals were not hold status in the Bayoo good ole boy club.

We were working alongside it for Marubeni, last I spoke to the captain, it was supposed to be going to shipyard after the job to be converted from anchor to subsea, knuckle-boom crane and what not. Haven’t seen it much since, don’t know if that’s played out or not, but it really isn’t a very large vessel, at least compared to others sporting cranes for subsea work.

Currently at LA ship getting a crane and helipad

[QUOTE=c.captain;152293]please explain…was Cal-Dive brought to its knees by it being suctioned of all cash by management or from simple neglect?

certainly after all the work they received post Katrina, they must have been rolling in money and we certainly know that they did not invest any of that back into a fleet renewal program. To stay the course with UNCLE JOHN, KESTREL and MYSTIC VIKING along with all the non DP vessels and barges as they did was to in effect cut their own throat in the face of competition from companies with new or almost new vessels and equipment. Anywhere in maritime, equipment and vessels have a finite commercial lifespan. You can keep a vessel alive on life support but there comes a time when the body is too old to be able to play the game as a competitor. Just that simple.[/QUOTE]
dont forget to add in Horizon comings and goings

[QUOTE=powerabout;152348]dont forget to add in Horizon comings and goings[/QUOTE]

certainly that was a purchase which netted Cal-Dive negatively…everything Horizon had was just a pile of scrap metal. Why is it the US GoM construction all refused to update their fleets with new equipment? Global was the only one who finally realized how far behind they were and first bought the ORION then had the two G-1200 class built (although I believe both of them to be too small for what they were intended to do)… Still up until Technip bought them, they were still saddled with a huge pile of scrap at Carlyss.

Also, why have so many companies proved to be flash in the pan and not able to actually compete? Superior, Torch, DMT…all here one day and gone the next. The only offshore construction companies with real staying power are the Europeans like Aker, Technip, Heerema, et all but then they love to use all that foreign equipment with foreign mariners. I respect them their ability but they still burn my butt!

[QUOTE=c.captain;152357]certainly that was a purchase which netted Cal-Dive negatively…everything Horizon had was just a pile of scrap metal. Why is it the US GoM construction all refused to update their fleets with new equipment? Global was the only one who finally realized how far behind they were and first bought the ORION then had the two G-1200 class built (although I believe both of them to be too small for what they were intended to do)… Still up until Technip bought them, they were still saddled with a huge pile of scrap at Carlyss.

Also, why have so many companies proved to be flash in the pan and not able to actually compete? Superior, Torch, DMT…all here one day and gone the next. The only offshore construction companies with real staying power are the Europeans like Aker, Technip, Heerema, et all but then they love to use all that foreign equipment with foreign mariners. I respect them their ability but they still burn my butt![/QUOTE]

Lack of a proven track record is a problem with start-ups and the ability to maintain capitalization can be tough. These start-ups for the most part had good ideas for a business but simply could not stick it out long enough to make it pay off. Torch is a good example. Bright ideas, especially with the pipe lay vessels but financial matters got them in the end, many of which were self inflicted. Look how long it took Edison Chouest Boat Rentals to become the behemoth they became. Hard work, realizing the importance of politics [both corporate and governmental], willing lenders, dedicated employees and a lot of luck made the business. The LOOP contract was the beginning of Chouest’s dominance.
A very successful business man once told me, “God knows I was not as smart as a lot of the competition but I out worked 'em and out politicked 'em. Now work is work but politics is a whole 'nother thing, make the wrong friend, pay off the wrong person and you might get your butt in a world a hurt, better to pay 'em all a little until you figure out things.Giving 'em a call every now and then just to see how they’re doing don’t cost a thing but pays a lot too.Other than that I just worked my ass off and took care of the people that worked for me. They looked after me when I was either too drunk or tired to care.”

[QUOTE=c.captain;152357] The only offshore construction companies with real staying power are the Europeans like Aker, Technip, Heerema, et all but then they love to use all that foreign equipment with foreign mariners. I respect them their ability but they still burn my butt![/QUOTE]

Those companies have very large tax advantages over American counterparts. Counties like Norway and Denmark have corporate income tax rates about 10% lower than US rates. They are subject to only one national income tax rather than federal and state tax like in the US. More importantly, they are not subject to that tax on income earned in other countries. Income earned by working in the US can be repatriated tax free. A US company working overseas is subject to both the foreign income tax and the US income tax, as well as state income tax depending on location. Virtually every 1st world nation has the same tax regimen on income earned overseas. The US is the big exception.

Very often those foreign counties have much more advantageous depreciation and expensing schedules for capital equipment. That encourages reinvestment in new equipment, and/or major upgrades to existing equipment. A country like Norway has a lot more ship yards, relative to its size than the US. It’s more tax advantageous. That creates jobs.

The employees of those companies, who work overseas, are generally not subject to income tax in their home countries. US citizens working abroad are subject to US income tax after the exemption. Again, the US is the outlier among developed nations.

I’m sure you know of Aker Philadelphia shipyard. It’s controlled by Norwegian Aker. British owned BAE has numerous shipyards in the US. AS far as I know, there are only 2 US based shipbuilding companies capable of building large ships. Both of those have to rely on DOD work.

Most people don’t know that, in the US, the largest market for tires in the world, there is only one US owned tire company left, Goodyear. We’re the largest market for heavy trucks. Most of the manufacturers are now European owned. I could go on and on, but a lot of that is due to tax regimes in those countries vs the US.

Having worked for a foreign boat company in a foreign country I know the office just viewed USA crew as too much trouble from licenses they cant understand to tax issues, the whole rest of the world is no issue.

The US places itself, and its US based companies, at a huge disadvantage by failing to harmonize its tax regimes with those of its trading partners. We in effect overtax US companies and subsidize foreign companies with the current US tax structure. This encourages US companies to move offshore, which they ate doing in droves, and keep their profits offshore.

As someone who has been seeking overseas employment, I can say that foreign companies certainly do not understand the overly complex, contradictory, and confusing domestic/stcw USCG licensing system. I have heard several times that “your CoC does not authorize you to serve on 3000 GT vessels because it is restricted to only 1600 tons.” Our government continues to screw us through ineptitude and bureaucratic indifference.