Abu Dhabi-based Gulf Marine Services (GMS) has turned down a USD 32 million takeover provide from Seafox International saying that the provide ”essentially undervalues GMS”.
As reported earlier, Seafox submitted an unsolicited and non-binding attainable money provide for the complete issued and to be issued share capital of GMS by a wholly-owned subsidiary of Seafox, at a worth of USD zero.09 per GMS odd share.
The Board of GMS has now unanimously rejected the provide from the corporate’s second-largest shareholder.
Apart from the low provide, the Board has given a number of different causes for the choice. GMS is claimed to be performing nicely, with a USD 240 million order backlog and a ”considerably diminished” value base. All of the corporate’s vessels are presently contracted, with a 76 p.c utilisation charge for 2020 and a 49 p.c utilisation charge for 2021, GMS mentioned.
GMS has additionally reached an in-principle settlement with lenders on revised phrases for a restructuring of its financial institution debt together with entry to present time period mortgage amenities and new working capital amenities.
The jack-up proprietor and operator described the provide from Seafox as ”wholly opportunistic”, including that the provide comes ”at a time of great macro uncertainty brought on by Covid-19.”
The firm questions the timing of the provide additional extra, saying that it got here ”the day earlier than GMS up to date the market on its 2019 outcomes and on the numerous current progress inside the enterprise,” and that the proposal ‘‘has been made simply a short while earlier than the deliberate conclusion of the documentation of our amended financial institution amenities.”
Tim Summers, Executive Chairman of GMS, mentioned: “Operationally and commercially, GMS is in significantly better form at this time than it was 12 months’ in the past. The Company is performing nicely however the tough setting; we’ve diminished prices and we’ll proceed to cut back them additional in 2020. We have agreed in precept a take care of our banks that gives the Company with long-term monetary stability. The Board stays extremely assured sooner or later success of the Company. Now shouldn’t be the time for shareholders to promote at a value that’s far beneath the true price of GMS.”
In response to GMS turning down its provide, Seafox mentioned that it ”is requesting shareholders to assist its Proposal and any provide which can be made on the identical phrases because the Proposal or in any other case, because it affords shareholders a considerable premium to the value of GMS previous to Seafox’s method; affords certainty in mild of the enterprise and market challenges GMS has been dealing with and continues to face; avoids the requirement to take part in an fairness increase and the substantial dilution of present fairness that might accompany any fairness increase; and within the various, removes the publicity to the danger of warrants or preferential securities being issued and/or PIK curiosity being incurred to GMS’ syndicate of banks.”
GMS presently owns and operates a fleet of 13 self-elevating assist vessels (SESVs) lively within the oil, fuel, and the renewable vitality industries. The firm is listed on the London Stock Exchange.
Seafox owns and completely manages eleven self-elevating jack-up models.
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