GMS, a leading provider of advanced self-propelled, self-elevating support vessels serving the offshore oil, gas and renewables industries, is pleased to announce that it has signed a term sheet for debt arrangements with its banks on significantly improved terms.
The Company is also pleased to confirm the underlying trading performance of the business remains strong and in line with the business plan.
Highlights
New debt arrangements provide a strong platform for future growth
Term sheet signed with all six of GMS's banks
Reduced interest to Libor +3%, retrospectively from
2020 underlying trading performance, in line with the business plan, showing solid revenue and margin improvement.
Entered 2021 in a stronger position, with 75% of the year's vessel utilisation already secured, up from 56% at the same time last year.
Debt Term Sheet Agreement
As detailed in previous announcements, the new Board has been in positive discussions with the Company's banks to agree significantly improved terms to the debt arrangements, put in place in
Under the revised terms, which are subject to the completion of definitive documentation, the rate of interest payable by the Company will decrease to Libor +3%, retrospectively from the beginning of this year. Based on the Company's current levels of debt, this will equate to a saving of c.
Additional time has been granted to the Company to raise equity and issue warrants. The previous PIK structure and vesting of warrants to the banks will be automatically cancelled once issued, providing the Company raises equity capital of
This revised structure provides the time needed to seek to complete the
Two of the Company's key shareholders,
Documentation for the revised agreement is expected to be finalized over the coming weeks. Furthermore, the
In the meantime, and as announced earlier, the banks have agreed to a further extension of the deadline, for the conclusion of improved terms, to the end of
2020 Trading and Operations
For the year to
Adjusted EBITDA, for the year to
These costs, totalling
Since being appointed, the new Board has also undertaken a review of the carrying value of the Company's assets, as part of a wider review and analysis of the business and its operations. As a result of that process, the Board is of the view that the carrying book value, across a number of the Company's barges, should be impaired, such impairment expected, once finalised with the Company's Auditors, to be in the range of
The changes outlined above, in relation to the relocation costs of two vessels and the impairment in the value of the Company's barges, will have no impact on the Company's operating cashflow. Equally, these adjustments have no impact on the Company's banking covenants but are considered necessary measures to support clarity and the future growth of the business. All of the Board approved adjustments are subject to final audit review.
The market for the Company's vessels remained strong throughout 2020, despite the volatile oil price, which is reflected in vessel utilization increasing to 81% (2019: 69%). Unsurprisingly, COVID created some challenges, with several contract awards delayed, from both NOC and EPC clients in the MENA region. These contracts are fully expected to be awarded in 2021. The company incurred
Following a successful trial of the cantilever workover system on the GMS Evolution in 2020, it recently commenced a long-term contract with the same NOC client, on improved terms. The system is unique and offers significant operational and cost benefits versus more traditional methods.
Contact:
Tel: +44 (0)20 7603 1515
Notes to Editors
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.
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. 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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