8th Mar 2019 09:49
LONDON (Alliance News) - Gulf Marine Services PLC on Friday said it has identified around USD6 million of potential annualised savings and is working to refinance its loans.
Shares in Gulf Marine were up 6.2% at 18.05 pence on Friday morning.
The company, which provides support vehicles for the offshore oil, gas, and renewable energy sectors, has evaluated its third round of cost savings and efficiencies and found approximately USD6 million of annual savings.
Gulf Marine has already begun implementing these savings and expects the full USD6 million to be realised by 2020.
Furthermore, the company is in talks with its banks and is assessing a "range of long term refinancing options".
The company warned in December that its would be in breach of "certain banking covenants at the end of 2018" with its trading performance unlikely to recover in 2019.
At that time, Gulf Marine said the weak 2019 is to hurt the firm's deleveraging rate and ability to service its increased debt payments from 2020 onward.
"The company and its management team have excellent long-standing relationships with the company's banking syndicate. Many of the institutions who lend to the company have supported the company over the last decade and continued their participation through various refinancing activities," Gulf Marine said.
Gulf Marine is also seeking to appoint a new chair, previous chair Simon Heale having agreed to step down after consultations with shareholders. This was welcomed by its 13.7% shareholder Seafox International Ltd, who had proposed resolutions intended to remove Heale and replace him with Times Newspapers chair Andrew Knight.
By March 26, its 2018 preliminary results date, Gulf Marine expects to announce a new chair appointment.
Having also recently appointed a new chief financial officer and new non-executive director, the company will have three independent and three non-independent directors. This complies with UK Corporate Governance Code, which requires an even split between independent and non-independent directors - with the exception of the chair.
"This board composition is the appropriate size for a company such as GMS. Further additions of non-independent non-executive directors would require the board to appoint additional independent directors to remain compliant with the UK Corporate Governance Code. The board believes that, in order to be effective and efficient, the number of directors should not be increased beyond the point at which the board becomes unwieldy and expensive to operate and rapid decision-making is compromised," said Gulf Marine.
Gulf Marine confirmed that Seafox has withdrawn support for two of its own resolutions, those intended to remove Heale and to replace Knight.
However, Seafox is still dissatisfied with the board composition and is seeking to appoint Emirates Insurance Co Chair Abdullah Mazrui and investment banker Hisham Halbouny to Gulf Marine board as non-executive directors.
Not only this, but Gulf Marine has also received letters requesting that the founder of Ithmar Capital Partners Ltd, Faisal Bin Juma Belhoul, be appointed to its board. A letter was received from Ithmar, as well as other shareholders who hold a more than 5% stake in Gulf Marine
"The board continues to consider that the resolutions 1 to 5 proposed by Seafox and the Ithmar requisitionists are NOT in the best interests of the company or its shareholders as a whole. Accordingly, the board unanimously recommend that shareholders VOTE AGAINST all of the resolutions to be proposed at the requisitioned general meeting," Gulf Marine wrote emphatically in its statement.
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