|6 Months Ended|
Jun. 30, 2017
|Long-term Debt and Capital Lease Obligations [Abstract]|
3.75% Convertible Senior Notes. Certain features included in the 3.75% Convertible Senior Notes, including the Exchange Option and the 2018 Put Option, terminated upon the completion of the Spin-off.
Upon completion of the Spin-off, the Company bifurcated the embedded conversion option liability of $27.3 million from the 3.75% Convertible Senior Notes and recorded an additional debt discount. The adjusted unamortized debt discount and issuance costs are being amortized as additional non-cash interest expense over the remaining maturity of the debt (December 1, 2022) for an overall effective interest rate of 7.95%.
Falcon Global Term Loan Facility. On August 3, 2015, Falcon Global entered into a term loan facility to finance the construction of two foreign-flag liftboats. The facility consisted of two tranches: (i) a $62.5 million facility to fund the construction costs of the liftboats (“Tranche A”) and (ii) a $18.0 million facility for certain project costs (“Tranche B”). Borrowings under the facility bear interest at variable rates based on LIBOR plus a margin ranging from 2.5% to 2.9%, or an average rate of 3.97% as of June 30, 2017. The facility is secured by the liftboats and is repayable over a five year period beginning the earlier of either six months after completion of the construction of the liftboats or June 30, 2017 and matures no later than June 30, 2022. In March 2017, the Company’s partner declined to participate in a capital call from Falcon Global and, as a consequence, the Company obtained 100% voting control of Falcon Global in accordance with the terms of the operating agreement. The Company has consolidated into its financial statements Falcon Global’s debt under this facility of $58.3 million, net of issue costs of $1.0 million, effective March 31, 2017 (see Note 4). During April 2017, the Tranche B facility was canceled prior to any funding. During the three months ended June 30, 2017, Falcon Global made scheduled payments of $1.5 million under Tranche A. As of June 30, 2017, the remaining principal amount outstanding under the facility was $57.8 million and is fully guaranteed by SEACOR Marine.
Falcon Global is currently not in compliance with certain financial maintenance covenants in the facility, including its debt service coverage ratio, maximum leverage ratio and minimum liquidity covenant and has received waivers from its lenders for these financial covenants for testing periods through and including December 31, 2017. The current waiver would not apply to the testing period ended March 31, 2018. The waiver agreement requires that SEACOR Marine provide a $14.5 million subordinated working capital loan to Falcon Global with the amount being fully funded by December 31, 2017. Falcon Global has one liftboat under charter, subject to customer approval, with several prospects developing for its second liftboat. Given the uncertainties surrounding the future financial performance of the two newly delivered liftboats and Falcon Global’s ability to meet its financial covenants for the next twelve months, the Company has classified the outstanding amounts due under the term loan facility as current obligations.
Sea-Cat Crewzer II. On April 28, 2017, the Company acquired a 100% controlling interest in Sea-Cat Crewzer II through the acquisition of its partners’ 50% ownership interest (see Notes 2 and 4). Sea-Cat Crewzer II has a term loan facility that matures in 2019 which is secured by a first preferred mortgage on its vessels. The facility calls for quarterly payments of principal and interest with a balloon payment of $17.3 million due at maturity. The interest rate is fixed at 1.52%, inclusive of an interest rate swap, plus a margin ranging from 2.10% to 2.75% subject to the level of funded debt (overall rate of 4.27% as of June 30, 2017). The balance of this facility as of June 30, 2017 was $22.1 million.
Sea-Cat Crewzer. On April 28, 2017, the Company acquired a 100% controlling interest in Sea-Cat Crewzer through the acquisition of its partners’ 50% ownership interest (see Notes 2 and 4). Sea-Cat Crewzer has a term loan facility that matures in 2019 which is secured by a first preferred mortgage on its vessels. The facility calls for quarterly payments of principal and interest with a balloon payment of $15.3 million due at maturity. The interest rate is fixed at 1.52%, inclusive of an interest rate swap, plus a margin ranging from 2.10% to 2.75% subject to the level of funded debt (overall rate of 4.27% as of June 30, 2017). The balance of this facility as of June 30, 2017 was $19.6 million.
Other. During the six months ended June 30, 2017, the Company borrowed $3.4 million under the Sea-Cat Crewzer III Term Loan Facility to fund capital expenditures and made scheduled payments on other long-term debt of $2.5 million. As of June 30, 2017, the Company had $4.6 million of borrowing capacity under subsidiary facilities.
Letters of Credit. As of June 30, 2017, the Company had outstanding letters of credit totaling $16.7 million with various expiration dates through 2018 that have been issued on behalf of the Company by SEACOR Holdings. Additionally, the Company has other labor and performance guarantees of $0.9 million.
The entire disclosure for long-term debt.
Reference 1: http://www.xbrl.org/2003/role/presentationRef