Tidewater announces pending sale of KMAR 404 vessels and plans share repurchaseNews // August 5, 2005
All conditions precedent to close, including the receipt by Tidewater of a non-refundable 10 per cent deposit and the deposit by the purchaser of the balance of the purchase price into an escrow account, have been completed and the transaction is expected to close shortly.
The culmination of the transaction will result in an approximate US$65.9 million pre-tax financial gain, or approximately US$42.8 million after tax, or US$.74 per common share. The transaction will result in an approximate US$112 million taxable gain, but no cash taxes will be due because of the availability of net operating loss carry-forwards.
The sales agreement also provides the company with an opportunity, for an extended period of time, to operate the six vessels on behalf of the new owners for a fixed fee per vessel per day. The company expects to use a portion of the proceeds of the saleto repay US$95 million of borrowings currently outstanding under its revolving credit agreement.
The company also announced that its Board of Directors has authorised a programme for the company to spend up to US$120 million to repurchase shares of its common stock in open-market or privately-negotiated transactions.
Tidewater intends to use its available cash and, when considered advantageous, borrowings under its revolving credit facility, to fund the share repurchase. The repurchase programme will end on the earlier of the date that all authorised funds have beenexpended or June 30th 2006.
Dean E Taylor, Chairman, President and Chief Executive Officer of the company, said: "Tidewater's Board and management believes that the establishment of a programme to repurchase common stock when its shares represent a significant market opportunity isa prudent and proactive use of the company's financial resources. Meanwhile, our strong balance sheet and borrowing capacity allow us the flexibility to pursue other attractive investment opportunities should they appear."