Gulf Marine Services (GMS), a provider of advanced self-propelled, self-elevating support vessels serving the offshore oil, gas and renewables industries, has agreed with its banks on an extension for the conclusion of improved terms for debt structure.
In a statement on 31 December 2020 GMS said it had been in discussions with its banks in good faith, since the changes made to its board on 10 November.
These discussions are in regard to certain improvements to the terms of the debt structure, that was concluded in June this year, as part of the restructuring of its debt facilities.
GMS reported at the end of December that discussions had been positive, yet not conclusive. The company anticipates that there is a reasonable chance to reach an agreement in the course of the coming weeks.
Against this background, the banks have agreed to extend, until 31 January 2021, certain obligations on the company, which it was otherwise required to have met by 31 December 2020.
The extended deadlines included the requirement to issue warrants to the banks on 4 January 2021.
This means that the company avoided an event of default on December 31 as a result of the general meeting voting against certain resolutions presented by the previous board. The new deadline is 31 January 2021.
This extension provides the time for the parties to conclude and formally document proposed changes to the timing and targeted quantum of new equity to be raised, the pricing of the debt, and the timing and conditions to be met, to avoid any payment of PIK interest and issuance of any warrants.
Meanwhile, GMS continues to make good progress under the new board and management, including the recently announced improvement in winning new work for the company, leading to an increase in secured fleet utilisation for 2021 to 75 per cent.
Namely, GMS was in December 2020 awarded contract extensions for two K-Class (small) vessels.