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Hampered by a global slowdown in oil-drilling activity and a prolonged slump in oil prices, New Orleans-based Tidewater Inc. said Friday it will file a prepackaged bankruptcy plan that wipes out $1.6 billion in debt.

The plan gives the offshore service vessel company's lenders and senior note holders 95 percent of the stock in the reorganized company, while existing shareholders will get 5 percent of the stock, as well as warrants — or rights to buy — company-issued shares based on the restructured firm's value, the company said.

Tidewater's lenders will also divvy up $225 million in cash and $350 million in new 8 percent, fixed-rate secured notes. The company plans to file a Chapter 11 petition in federal bankruptcy court in Delaware by Wednesday.

Tidewater describes itself as "the leading provider of larger offshore service vessels to the global energy industry," with "a global footprint" and "over 50 years of experience providing marine support services."

Oil prices have plunged since hitting $115 per barrel in June 2014, and Tidewater and other energy service companies have suffered. During that time, Tidewater's stock has plummeted from almost $55 per share in 2014 to 88 cents on Friday.

On Friday, Brent crude, the international benchmark followed by many refineries, hovered at nearly $50 a barrel. Federal forecasters predict little relief: Brent prices are expected to average $53 per barrel in 2017 and $57 in 2018, the U.S. Energy Information Administration said this week.

As drilling activity has slowed, so too has the demand for offshore supply vessels like Tidewater's.

There were 712 rigs exploring for oil in the U.S. last week, up by nine from a week earlier and up by 394 from a year ago, Houston oilfield services company Baker Hughes Inc. said Friday. But that's compared to roughly 1,540 rigs exploring for oil in June 2014.

Meanwhile, Tidewater's losses have mounted: The company lost $297.7 million, or $6.32 per common share, for the three months ending Dec. 31, compared with $19.5 million, or 42 cents per common share, for the same period a year earlier.

Meanwhile, Tidewater has been negotiating with lenders since early 2016. It had warned since October that it could file for bankruptcy unless it could restructure its debt.

After the restructuring, Tidewater expects to remain a publicly traded company listed on the New York Stock Exchange. Tidewater shares have traded for more than 30 days at less than $1 — the minimum required for a stock exchange listing. The company has until Oct. 18 to reach that level.

President and Chief Executive Officer Jeffrey Platt said the agreement allows Tidewater to slash debt and provide sound financial footing for the company's future.

Since the downturn began, Tidewater has reduced its workforce by one-third and idled 40 percent of its fleet, according to a recent investor presentation.

Its fleet included 262 vessels that it owned or chartered, including 116 stacked vessels, at the end of December.

Joseph Bennett, Tidewater's executive vice president and chief investor relations officer, did not return a call Friday.

"We believe that successful completion of our restructuring will provide the necessary liquidity and operational flexibility for Tidewater to continue to operate at lower levels of activity until offshore drilling activity recovers and more reasonable levels of vessel utilization and day rates are restored," Platt said.

Friday's announcement was no surprise to some industry observers.

"If there's any good news in the announcement, it's that this is a prepackaged bankruptcy with forgiveness of a significant amount of debt as part of the deal," said Eric Smith, associate director of the Tulane Energy Institute. "The bad news, of course, is that the existing shareholders pretty much get dropped down to 5 percent, with some options going forward."

Tidewater's history in New Orleans dates back more than six decades. Tidewater Marine Service was formed in the 1950s by a group of investors, led by the Laborde family, who developed the first offshore service vessel that was designed to support the emerging offshore drilling industry.

Tidewater's fleet is now the largest in the industry, deployed in dozens of countries, as the push to explore for and produce oil and gas offshore has ventured into deeper waters. The bulk — more than 90 percent — of the fleet works outside the U.S.

The company survived the oil bust of the mid-1980s and emerged from the downturn by taking a path of growth through mergers and acquisitions. By 2000, the company began an aggressive new building program that allowed Tidewater to upgrade its fleet as customers pushed further into the deepwater market.

But with global drilling activity expected to stay at a low level for at least another year, there is no immediate relief in sight for companies like Tidewater.

"When the drilling rigs aren't working, they aren't working," Smith said.

"It's a great fleet," he added. "It's just that right now, there's no fundamental need for it, and you've got significant debt."

Advocate staff writer Ted Griggs contributed to this report

Follow Richard Thompson on Twitter, @rthompsonMSY.