REG - Gulf Marine Services - Debt Update & Establishment of a Dividend Policy

Gulf Marine ServicesAnnouncement

01/08/2024 07:00

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RNS Number : 6858Y  Gulf Marine Services PLC  01 August 2024

 

 

August 1(st), 2024

 

 

 

Gulf Marine Services PLC

('Gulf Marine Services', 'GMS', 'the Company' or 'the Group')

Announcement of a landmark new bank deal and establishment of a dividend
policy

 

 

Gulf Marine Services (GMS), a leading provider of self-propelled and
self-elevating support vessels for the offshore oil, gas, and renewables
sectors is pleased to announce that it reached an agreement with First Abu
Dhabi Bank, Commercial Bank of Dubai and HSBC Bank to refinance its current
bank debt. The three banks, two of which are current lenders, will have an
equal participation to the term loan and to the working capital facility.

 

The facility will consist of a term loan of an amount equivalent to USD 250
million in United Arab Emirates Dirhams (AED) as a well as a working capital
facility of an amount equivalent to USD 50 million, also in United Arab
Emirates Dirhams. The loan will have a tenor of five years from the facility
agreement date. 80% of the term loan will be amortized quarterly over 5 years
with a 20% balloon. Exposure to the AED will be hedged in full.

 

GMS Board has also approved a dividend policy dedicating 20%-30% of annual
adjusted net profit towards distributions to shareholders in the forms of
dividends and potentially share buyback provided all bank covenants are met
and other plans permit.

 

GMS is also taking this opportunity to confirm it is maintaining its adjusted
EBITDA guidance for the 12 months ending December 2024 in the range of USD 92
million to USD 100 million, as first announced on 28 February 2024.  We are
also working on revisiting our EBITDA guidance for 2025 towards year end.

 

 

Mansour Al Alami, GMS Executive Chairman, commented:

 

"I am delighted to finally announce this deal for a USD 300 million facility
today. This is yet another testimony of the progress achieved by GMS in the
past couple of years. It signals a new dawn for us and the start of a new
journey. It acknowledges our recent years track record and will enable us to
achieve our long term objectives on growth and on shareholders rewards,
without jeopardizing our commitment to deleveraging.

 

"I would like to thank all those who worked hard to get it done.

 

"As we have made an early settlement towards our debt last week, our current
net debt is USD 234 million, down from USD 267.3 million as of December 31st,
2023.

 

"GMS continues to monitor the positive changes to its shareholders register.
We welcome our  new investors and are pleased to see institutions showing
increasing interest, higher than we've been seeing in a while.

 

"The deal allows us to plan for improving shareholders value by investment in
growth and for shareholders rewards by reducing restrictions on dividend
payment and share buyback. GMS will look to add opportunistically and on
favorable terms assets that could have an immediate impact on building the
backlog and the profitability."

 

Alex Aclimandos, GMS Chief Financial Officer, added:

 

"This landmark transaction will have significant advantages to all
stakeholders. The financing costs, currently standing at 300 bps (+ SOFR) will
gradually go down to 225 bps (+EIBOR) when net leverage gets below 2.0 times.
At transaction date expected net leverage levels, the financing costs will be
at 250 bps plus EIBOR. This will provide additional cash liquidity to GMS. The
surplus liquidity the deal provides will accelerate the achievement of GMS
goals.

 

"While we maintain our focus on deleveraging the business to levels providing
agility, the transaction enables us to achieve shareholder growth. It allows
us to lease or to acquire new vessels to fuel the topline, and removes most
restrictions related to direct payment to shareholders, either via share
buyback or via dividend payment.

 

"We expect the transaction to close before December 31st, 2024.

 

"We will be announcing our reviewed results in approximately 4-5 weeks. As we
stand, our preliminary unaudited and unreviewed results show our adjusted
first half EBITDA are on track to be within the earlier provided guidance for
the year. Our backlog as of August 1st 2024 stands at USD 414.5 million."

 

This announcement contains inside information and is provided in accordance
with the requirements of Article 17 of the Market Abuse Regulation (EU) No.
596/2014 (as it forms part of UK law by virtue of the European Union
(Withdrawal) Act 2018, as amended).

 

-ENDS-

 

 Enquiries:                 Tel: +44 (0) 20 7603 1515

Gulf Marine Services PLC

 Mansour Al Alami

 Executive Chairman
 Celicourt Communications   Tel: +44 (0) 20 7770 6424

 Mark Antelme

 Philip Dennis

 Ali AlQahtani

 

 

Notes to Editors:

Gulf Marine Services PLC, 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, Saudi Arabia and Qatar. 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. 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.

Gulf Marine Services PLC's Legal Entity Identifier is 213800IGS2QE89SAJF77

www.gmsplc.com

Disclaimer

The content of the Gulf Marine Services PLC website should not be considered
to form a part of or be incorporated into this announcement.

 

Cautionary Statement

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.

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