DUBAI, March 31 (Reuters) – Abu Dhabi-based Gulf Marine Services (GMS) said on Tuesday it had reached an agreement with its syndicate of banks to restructure its debt that will help it weather the coronavirus crisis.
London-listed GMS provides support vessels for offshore oil and gas and other energy installations.
It has been hurt by a downturn in the oil and gas services industry triggered by a prolonged slide in oil prices that has turned into a deep slump since the coronavirus crisis destroyed demand and a production cut agreement between OPEC and its allies collapsed.
“The agreement is a key step towards GMS’s objective of achieving a sustainable and (deleveraged) capital structure,” it said in a statement, adding the deal was the result of discussions over several months.
“GMS today is in a much healthier and stronger position to face the unique challenge of COVID-19 as well as continued oil price volatility,” GMS Executive Chairman Tim Summers said in the statement.
The agreement gives the company incentives to reduce debt through a shareholder equity raise or else to issue “preferential securities, and/or the incurrence of PIK (payment in kind) interest, to the banks,” the statement said.
It extends the maturity on existing loans to June 30, 2025, provides a new $50 million working capital loan, re-phases amortisation requirements and increases financial covenant headroom.
GMS is also seeking shareholder approval for a share capital increase of at least $75 million, it said.
GMS had $400 million in total net debt at the end of 2018. It began re-negotiating terms with creditors after it said it might not be able to meet principal debt repayments as of this year.
The company said on Tuesday it planned to finalise the documentation for the agreement, which it said is legally non-binding, by the end of June.
To allow the restructuring process to be completed, the banks have rolled over certain loans for GMS, waived applicable financial covenant tests and deferred related principal payments from March 31 to June 30, GMS said.
The company’s results will be delayed beyond the planned date of April 6 at the request of Britain’s Financial Conduct Authority (FCA), the company said.
It said 2019 EBITDA (earnings before interest, tax, depreciation and amortisation) should be at the top end of guidance of $48-$50 million. (Reporting by Yousef Saba; editing by Barbara Lewis)
Guyana has taken a significant step in expanding its offshore oil and gas production, with energy giants TotalEnergies, Qatar Energy, Petronas, Cybele Energy, Delcorp, and International Group Investment securing production...
MOSCOW, Oct 16 (Reuters) – Russia has begun designing nuclear-powered submarines to export liquefied natural gas (LNG) from the Arctic to Asia to try to nearly halve the journey time along the Northern...
Damen Shipyards, Windcat, and CMB.TECH have unveiled the first of six cutting-edge Commissioning Service Operation Vessels (CSOVs). The landmark launch, which took place on October 12th at Ha Long Shipyard...
October 15, 2024
Total Views: 2215
Why Join the gCaptain Club?
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.