Seacor CEO suggests merger with GulfMarkNews // October 26, 2016
Charles Fabrikant, CEO of Seacor, has written to the board of directors at fellow offshore support vessel operator GulfMark suggesting that the companies merge.
In a letter dated 18 October, Mr Fabrikant said: "We write this letter to you and our co-stakeholders as a significant bondholder and also one with the perspective of being in the same business as Gulfmark Offshore for 27 years. SEACOR Holdings currently owns approximately US$54.0 million of Gulfmark’s 6 3/8% Senior Notes due 2022.
"We believe that Gulfmark is at a crossroads:
• It can restructure its debt and continue operating independently, incurring costs of a public company and overhead for a small fleet with limited employment. This will most certainly deplete value to the detriment of shareholders and creditors, or
• It can choose to restructure its debt and combine with a financially stronger participant in its industry, thereby
benefitting from cost synergies and positioning for future growth."
Mr Fabrikant said uncertainty in the market, coupled with GulfMark's balance sheet, "puts the issue of Gulfmark’s survival front and centre.
"As noteholders, we believe restructuring to create a manageable level of debt is priority number one. Consolidation to generate cost synergies and operating efficiencies of scale enhances the potential benefit when arecovery materializes."
Mr Fabrikant said GulfMark's recent public filings show that it appears to face a liquidity shortfall and "very little cash has been generated from operations.
"It appears to be only a matter of time before Gulfmark will be in covenant default," said Secor's CEO.