Trico Marine Services, Inc. (fka TRMAQ)

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Judge Clears Trico Marine To Sell 10 Ships For $33 Million

Last update: 11/15/2010 4:23:11 PM

By Eric Morath
Of DOW JONES DAILY BANKRUPTCY REVIEW

Trico Marine Services Inc. (TRMAQ) was cleared to move forward with the sales of 10 ships that could generate a critical $33 million for the offshore drilling services firm in need of cash to avoid a forced liquidation by its senior lender.

Judge Brendan Shannon of the U.S. Bankruptcy Court in Wilmington, Del., on Friday signed off on sales of eight ships to two buyers without requiring the deals to be tested at auction and set a Nov. 24 auction date for the remaining two vessels.

The approvals come on the heals of Trico's emergency request last week seeking a reprieve from a demand by its senior lenders, affiliates of Tennenbaum Capital Partners LLC, to repay $35 million in debt or surrender the collateral that secures those loans.

Trico, which gained a short reprieve pending a hearing, said it needed time to complete pending sales so it could repay Tennenbaum.

The company should be able to move forward quickly with two deals because they don't require an auction or further court approval.

GML (Offshore & Petroleum Ltd.) has agreed to pay $5.8 million for five vessels: Trinity River, Suwanee River, Roe River, Oak River and Elm River. Sea Lyon Marine Inc. said it would pay $1.5 million for three towing and supply vessels: Carson River, East River and Powder River.

The company said it marketed those vessels through several international brokerage houses and is confident that both proposed transactions represent the "highest and best" offers for the assets. Selling the vessels as part of group sales, rather than entertaining multiple, separate offers, should ultimately reap more money for the estate, Trico said in requesting approval for the sales.

The company aims to close both deals this month.

Trico was also cleared to hold an auction for its Moon and Mystic ships. Tidewater Inc. (TDW) will kick off the bidding with its $26 million offer.

Each vessel is 210 feet long and is used to support offshore drilling construction, repair and maintenance work, as well as to serve drilling and production facilities.

The proposed sales are part of Trico's liquidation of its towing and supply business.

Trico has a second deal for Tidewater to buy its Sabre and Star vessels for $50 million. That deal, however, isn't subject to bankruptcy-court approval because those ships are owned by a Trico affiliate that isn't under Chapter 11 protection.

The Woodlands, Texas, company sought bankruptcy protection Aug. 25, saying the economic downturn and a highly leveraged balance sheet had squeezed its liquidity. Trico, however, has operating units, foreign subsidiaries and a joint venture that aren't part of the Chapter 11 case.

The company, which emerged from a previous Chapter 11 restructuring in 2005, has traditionally been a sea towing and supply service company, but it expanded its business in recent years.

Trico purchased DeepOcean AS, a company that provides inspection, maintenance and repair services to underwater equipment used in gas and oil production, and CTC Marine Projects Ltd., which digs trenches for underwater cables and pipelines, in 2007 and 2008.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.) -By Eric Morath, Dow Jones Daily Bankruptcy Review; 202-862-9279; [e-mail] (END)

Dow Jones NewswiresNovember 15, 2010 16:23 ET (21:23 GMT)