Gulf Marine banks warn over potential default

Gulf Marine Services' lenders have warned the company they are not willing to negotiate any of the terms of the company's financial agreements after a group of shareholders voted down a key measure at a general meeting.

At a shareholder meeting on 27 October Seafox International and two other investors voted against and defeated a resolution to issue warrants to the six banks by the end of 2020. That action is required by oil and gas platform provider's borrowing agreement after it shelved plans to raise $75m from shareholders.

The banks said if GMS did not raise equity or issue warrants by 31 December it would default on its borrowing agreement.The company's biggest lender, Abu Dhabi Commercial Bank, also said it would assert its rights if the warrants were not issued, probably forcing GMS into administration.

"The banks reiterate that they are not willing to renegotiate any of the terms of the finance documents and expect the company and the parent to perform all of their respective obligations under the common terms agreement." the banks' agent said in a letter to GMS. "This position continues to hold regardless of the composition of the company's board or the appointment of new directors."

GMS is locked in a battle with Seafox, Mazrui Investments and Horizon Energy. It has accused Seafox of trying to disrupt the company and has accused Seafox, which tried to buy GMS in May, of trying to seize control.

The company's shares have more than halved since early June as the conflict has escalated. On Monday the shares fell 8.3% to 6.32p.