NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
30 July 2020
Gulf Marine Services PLC
Bank Letter re Seafox International Limited and other Shareholders' votes
Gulf Marine Services PLC ("GMS" or the "Company") announces that it yesterday received a letter from the agent on behalf of all six lenders (the "Bank Letter") in relation to the votes of Seafox International Limited ("Seafox"), Mazrui Investments LLC ("Mazrui"), and Horizon Energy LLC ("Horizon") at the Company's recent annual general meeting. The full text of the letter is set out below.
The Bank Letter rejects the statements made by Seafox on 13 July 2020 with regards to the common terms agreement announced by the Company on 10 June 2020, and expresses the lenders' concern that Seafox is "publicly disseminating a view which the lenders and the Company do not share at this critical juncture."
The common terms agreement was thoroughly discussed, heavily negotiated and agreed in good faith by all parties. Under the agreement, GMS's lenders have committed to provide additional funding to the Company, to assist management in delivering the agreed business plan and the associated working capital needs, to the benefit of all stakeholders. Both the Board and the lenders remain committed to its terms. As set out in the Bank Letter, the lenders' expectation that the Company will continue to perform its obligations under the common terms agreement will continue regardless of the composition of the Company's Board of Directors or the appointment of new Directors.
Tim Summers, Executive Chairman, said:
"The revised debt structure agreed with our banks in June provides a platform for GMS to sustain its upward trajectory and continue to drive growth as oil and gas markets stabilize. GMS's Board and its banks are fully aligned in ensuring that the financial foundation of the business remains stable and robust, which is essential for the future success of the Company. The Board's commitment to creating value for all stakeholders is unwavering."
Letter from Agent on behalf of GMS's banks
28 July 2020
GMS' Annual General Meeting - Seafox International Limited and other Shareholders votes
We refer to (i) your letter dated 30 June 2020 in relation to certain actions taken by Seafox International Limited (Seafox) and other shareholders at the Annual General Meeting of the Company in relation to the removal and appointment of certain directors (the AGM Communication) and (ii) the Common Terms Agreement originally dated 29 November 2015 (as lastly amended and restated on 16 June 2020, the Common Terms Agreement).
Terms defined in the Common Terms Agreement shall have the same meaning when used in this letter. We are writing to you in our capacity as Intercreditor Agent under the Common Terms Agreement, on behalf of all the Banks.
In light of the events described in the AGM Communication and certain statements subsequently made by shareholders of the Company, the Banks would like to take the opportunity to reconfirm certain facts and make the following clarifications:
· the amendments to the Common Terms Agreement were negotiated in good faith and at arms' length between the Banks and the Company, with the support of internationally recognised legal and financial professional advisers;
· the discussions and negotiations on the terms of the revised Common Terms Agreement between the Banks and the Company, were subject to extensive discussions over a prolonged period of over 12 months;
· under the amended terms of the Common Terms Agreement, the Banks have committed to provide additional funding to the Company, to assist management in delivering the agreed business plan and the associated working capital needs, to the benefit of all stakeholders;
· ultimately, the transaction was supported and approved by all Banks as well as the Board of Directors of the Company;
· as such, the Banks reject the statements made by Seafox on 13 July 2020 with regards to the Common Terms Agreement describing some terms as "punitive" and "onerous". The Banks are concerned that Seafox, the largest shareholder in the Company, is publicly disseminating a view which the Banks and the Company do not share at this critical juncture.
With reference to the provisions of Clause 20.27 (Warrants) and Clause 23.16 (Warrants), we note again that in the absence of a sufficient number of favourable votes of the shareholders, both the decision to raise equity (which the Banks understand may be necessary in order to effect a USD75,000,000 prepayment) as well as the issuance of the Warrants, may be blocked, therefore causing an Event of Default under the Common Terms Agreement.
While we recognise that shareholders have an unfettered right to exercise their rights in their absolute discretion, we expect that the Company will ensure that the terms of the Common Terms Agreement, in particular the relevant prepayment and Event of Default provisions, are clearly understood by all shareholders since the occurrence of any such Events of Default will give the Banks a right to accelerate the Facilities and enforce any of their rights under the Common Terms Agreement, including enforcement of asset security.
For the avoidance of doubt, the Banks confirm that they are not willing to renegotiate any of the terms and expect the Company to perform all of its obligations under the Common Terms Agreement. This position continues to hold regardless of the composition of the Company's Board or the appointment of new directors. The Banks' primary concern remains the financial health of the Company and its ability to continue its business operations effectively and at the same time fulfil its contractual obligations to the Banks. The Banks expect the Company to clearly communicate with its shareholders to reassure them that the restructuring terms have been thoroughly discussed, heavily negotiated and agreed in good faith.
This letter may be communicated by the Company to all shareholders.
Tim Summers, Executive Chairman
Stephen Kersley, Chief Financial Officer
Tony Hunter, Company Secretary
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+44 (0) 207 603 1515
Brunswick (PR Adviser to GMS)
Patrick Handley - UK
Will Medvei - UK
Jade Mamarbachi - UAE
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+44 (0) 20 7404 5959
+971 (0) 50 600 3829
The information contained within this announcement is considered by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information will be considered to be in the public domain.
The person responsible for arranging for the release of this announcement on behalf of GMS is Tony Hunter, Company Secretary.
The content of the Gulf Marine Services PLC website should not be considered to form a part of or be incorporated into this announcement.
This announcement includes statements that are forward-looking in nature. All statements other than statements of historical fact are capable of interpretation as forward-looking statements. These statements may generally, but not always, be identified by the use of words such as 'will', 'should', 'could', 'estimate', 'goals', 'outlook', 'probably', 'project', 'risks', 'schedule', 'seek', 'target', 'expects', 'is expected to', 'aims', 'may', 'objective', 'is likely to', 'intends', 'believes', 'anticipates', 'plans', 'we see' or similar expressions. By their nature these forward-looking statements involve numerous assumptions, risks and uncertainties, both general and specific, as they relate to events and depend on circumstances that might occur in the future.
Accordingly, the actual results, operations, performance or achievements of the Company and its subsidiaries may be materially different from any future results, operations, performance or achievements expressed or implied by such forward-looking statements, due to known and unknown risks, uncertainties and other factors. Neither Gulf Marine Services PLC nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. No part of this announcement constitutes, or shall be taken to constitute, an invitation or inducement to invest the Company or any other entity, and must not be relied upon in any way in connection with any investment decision. All written and oral forward-looking statements attributable to the Company or to persons acting on the Company's behalf are expressly qualified in their entirety by the cautionary statements referred to above.
GMS, a company listed on the London Stock Exchange, was founded in Abu Dhabi in 1977 and has become a world-leading provider of advanced self-propelled self-elevating support vessels (SESVs). The fleet serves the oil, gas and renewable energy industries from its offices in the United Arab Emirates and Saudi Arabia. The Group's assets are capable of serving clients' requirements across the globe, including those in the Middle East, South East Asia, West Africa, North America, the Gulf of Mexico and Europe.
The GMS fleet of 13 SESVs is amongst the youngest in the industry, with an average age of eight years. The vessels support GMS's clients in a broad range of offshore oil and gas platform refurbishment and maintenance activities, well intervention work and offshore wind turbine maintenance work (which are opex-led activities), as well as offshore oil and gas platform installation and decommissioning and offshore wind turbine installation (which are capex-led activities).
The SESVs are categorised by size - K-Class (Small), S-Class (Mid) and E-Class (Large) - with these capable of operating in water depths of 45m to 80m depending on leg length. The vessels are four-legged and are self-propelled, which means they do not require tugs or similar support vessels for moves between locations in the field; this makes them significantly more cost-effective and time-efficient than conventional offshore support vessels without self-propulsion. They have a large deck space, crane capacity and accommodation facilities (for up to 300 people) that can be adapted to the requirements of the Group's clients.
The Company's Legal Entity Identifier is 213800IGS2QE89SAJF77.
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