(Alliance News) - Gulf Marine Services PLC on Tuesday said both resolutions at a general meeting were rejected by investors, which the UAE-based support vessels provider attributed to votes made by shareholders Seafox International Ltd, Mazrui Investments LLC or Horizon Energy LLC.
Gulf Marine shares were 12% lower at 7.10 pence each in London on Tuesday afternoon. The stock is essentially flat in the year to date.
Votes to allow the directors to allot securities and to disapply pre-emption rights both were rejected by just shy of 58% of votes. Gulf Marine said that, out of all the votes made to reject the motions, just under 97% were made by shares beneficially held by Seafox, Mazrui and Horizon.
Seafox holds roughly a 30% stake in Gulf Marine. Earlier in October, Gulf Marine said Seafox opted to vote against the firm's proposed warrant issue.
The company was seeking shareholder approval to issue warrants to its lending banks by the end of 2020.
Gulf Marine on Tuesday warned that an absence of an equity raise or an issue of warrants to its lenders could mean it defaults 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.
The company said it needs to raise at least USD75 million to pay down part of its debt by the end of the year and also issue warrants to lenders amounting to a 20% of Gulf Marine's shares.
"In accordance with paragraph 4 of the UK Corporate Governance Code, the board will publish an update on views received from shareholders, and actions taken, within six months of the general meeting, and a final summary together with any further steps in the next annual report," Gulf Marine added.
Gulf Marine has previously accused Seafox of a "sustained campaign" to disrupt its governance and management. Gulf Marine said it was forced to put the brakes on an equity raise, blaming Seafox as a result. Seafox then hit back, calling Gulf Marine "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," the shareholder said earlier in October.
"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."
By Eric Cunha; ericcunha@alliancenews.com
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Gulf Marine Services (GMS)