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(Alliance News) - Gulf Marine Services PLC on Thursday said it was forced to put the brakes on an equity raise, putting the blame on its investor Seafox International Ltd.
On Wednesday, the UAE-based support vessels provider said Hesham Halbouny and Hassan Heikal - appointed to board in August after requisitioned meeting by Seafox - resigned with immediate effect. Within two hours of receiving Heikel's resignation, Gulf Marine said it received letter from Seafox requesting the company to requisition a general meeting to reappoint Heiekel.
Gulf Marine on Thursday accused Seafox, which holds a 30% stake in the company, of a "sustained campaign" to disrupt its governance and management.
"As a result of the announcement of Seafox's proposed wholesale changes to the board on September 22, 2020, the company has not been able to meaningfully engage with potential investors, which is a critical preparatory step for the equity raise," Gulf Marine said.
"In light of this and the absence of clarity over the company's future governance, the only responsible action for the company to take was to avoid the significant costs associated with further preparations for the equity raise, especially at a time of limited liquidity."
It added that there is "no reasonable prospect" that it can complete an equity raise by the end of the year. It warned that should a fundraise not happen, Gulf Marine may be at risk of default under its bank facilities.
"If the lenders enforce their rights, the company could be put into administration and shareholders could lose the entire value of their investment," Gulf Marine cautioned.
Seafox hit back on Thursday, calling Gulf Marine's statement "misleading".
"Seafox believe that the suggested capital increase needed full shareholder support through consultation and potential underwriting/commitment as the company is trying to raise significant capital in relation to its current market capitalisation. This as far as we are aware did not happen. There is no aborted process it is only a board that is currently seeking to limit its own personal liability," Seafox said.
"Such an important bank deal should have been put forward to a shareholder’s vote given the need for warrants or capital which is a shareholder matter. The capital raise process should have started a long time ago and not subject the company to such a major risk by limiting the capital increase to a tight window."
Gulf Marine shares closed 17% lower at 8.00 pence each in London on Thursday.
By Eric Cunha; ericcunha@alliancenews.com
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