Abu Dhabi-based Gulf Marine Services rejected a takeover approach from its shareholder Seafox International, arguing that the offer of $0.09 per share announced last Thursday was "wholly opportunistic" and undervalued the business.
The company said the offer had been made "at a time of significant macro uncertainty" caused by the Covid-19 outbreak which had depressed share prices globally, including its own.
The offer, which values the company at $31.54 million (Dh115.8m), "fails to reflect the significant operational and financial progress made over the last 12 months and GMS's materially improved long-term prospects", it said in a statement on Monday.
"The company is performing well notwithstanding the difficult environment; we have reduced costs and we will continue to reduce them further in 2020," executive chairman Tim Summers said.
On Friday, London-listed GMS reported its losses had widened to $85.5m for 2019, up from $5.1m last year. However, $59.1m of this was due to asset impairments on its fleet, with $5m being set aside for an older vessel that was scrapped, Mr Summers told The National. Revenue fell 11.8 per cent to $108.7m.
“The most important thing is, I think, ebitda delivery, that was just higher than the guidance we gave last year. In the context of a difficult marketplace it’s a very solid set of results,” he argued.
The company’s earnings before interest, tax, depreciation and amortisation stood at $51.4m, compared to $58m in the prior year, but 2019 was a year of transformation for the company that saw its former board and management replaced, a major cost-cutting exercise being launched and a renegotiation of its bank debts following a breach of its covenants in late 2018.
A new deal with lenders agreed at the end of March, extends the company’s existing debts of almost $400m and provides up to $50m of working capital. Legal documentation is still being finalised, but is expected to complete by the end of June, Mr Summers said.
“The first quarter of this year was slightly better than our business plan and 83 per cent of our planned revenues for 2020 are covered under existing contracts,” Mr Summers said.
However, in a follow-up statement on Monday, Seafox International - which holds a 13.7 per cent stake in GMS - said the company still faced a number of challenges, including a likely requirement of further capital.
The Netherlands-based Seafox pointed to the current Covid-19 outbreak and the slump in global oil prices, adding that "in the last sustained period of depressed oil prices, GMS saw its secured backlog fall by over 75 per cent in just one year (from $615.9 million in November 2015 to just $137.3m in November 2016)".
Seafox argued the company's current backlog of $240m "may face some deterioration, especially in the short and medium term" and that the company had been forced to renegotiate its bank debts with lender every year since its IPO four years ago "at a material cost to its shareholders".
It said the company's current net debt of $390m equates to an "adjusted ebitda multiple of more than 7.5x" as at the end of last year. The agreement with lenders gives it space to execute its business plan "but requires significant deleveraging" to avoid heavy additional penalties either through the exercise of warranties or imposition of higher interest PIK notes.
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
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Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
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The specs
Engine: 6.2-litre V8
Transmission: seven-speed auto
Power: 420 bhp
Torque: 624Nm
Price: from Dh293,200
On sale: now
UAE currency: the story behind the money in your pockets
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
Company profile
Name: Oulo.com
Founder: Kamal Nazha
Based: Dubai
Founded: 2020
Number of employees: 5
Sector: Technology
Funding: $450,000
If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.
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