GulfMark gets cash injection from MFP Partners and Franklin Mutual AdvisersCompany News // November 30, 2016
GulfMark Offshore recently announced a tender offer to purchase for cash up to US$300 million in aggregate principal amount of its outstanding 6.375% Senior Notes due 2022. The tender offer will be funded by money invested by MFP Partners LP and Franklin Mutual Advisers, LLC that will be conditional on the closing of the tender offer and will take the form of a new US$100 million secured term loan facility, a US$100 million revolver to refinance the existing revolver and at least US$50 million, in the aggregate, in new equity.
The tender offer is being made upon, and is subject to, the terms and the other conditions set forth in the offer to purchase, dated November 23, 2016 and the related Letter of Transmittal.
In connection with the tender offer and new equity investment from MFP Partners LP and funds advised by Franklin Mutual Advisers, LLC, the company and Raging Capital Management LLC have entered into (i) a Tender Support Agreement, pursuant to which Raging Capital has committed, among other things, to tender $85 million in aggregate principal amount of Notes in the tender offer and (ii) a Voting Agreement, pursuant to which Raging Capital has agreed to, among other things, vote its capital stock in the Company in favor of the approval of the issuance of the shares of Class A Common Stock issuable upon the conversion of the Series A Preferred Stock.
Subsequent to the closing of the tender offer, the company will launch a stockholder rights offering to allow all of its stockholders to participate in a restructured GulfMark at the same equity price provided to the investors. Pursuant to the Tender Support Agreement, Raging Capital has agreed to invest its pro rata share in the stockholder rights offering. GulfMArk said there can be no assurance that the stockholder rights offering will be completed.
Quintin Kneen, President and CEO, commented, “Our business is in a difficult and extended downturn due to an unprecedented decrease in the global demand for offshore drilling combined with a material increase in the supply of offshore support vessels.
“We are excited about the opportunity to partner with MFP Partners and Franklin Mutual Advisors to raise new capital in a transaction that benefits all stakeholders. The proposed transaction significantly reduces our indebtedness and increases our near-term liquidity as this industry works to correct this crippling oversupply of vessels,” Mr Kneen concluded.
The tender offer will expire on 21 December 2016 unless extended or earlier terminated.