Gulf Marine Services Regulatory News (GMS)

Gulf Marine Services PLC

('Gulf Marine Services', 'GMS', the 'Company' or the 'Group')

22 February 2019

Publication of shareholder circular and notice of general meeting

Further to the announcements made on 31 January and 21 February 2019, Gulf Marine Services (LSE: GMS), the leading provider of advanced self-propelled self-elevating support vessels (SESVs) serving the offshore oil, gas and renewable energy sectors, announces that the Company is today publishing a shareholder circular which includes a notice of a General Meeting requisitioned by several GMS shareholders to consider, in total, five ordinary resolutions to remove the Chair and appoint four additional directors (the "Circular").

The Board is unanimously recommending that shareholders VOTE AGAINST all of the resolutions.

Background

On 1 February 2019, the Board received a written notice from Seafox International Limited ("Seafox") requesting that the Directors convene a general meeting of the Company to propose four ordinary resolutions to: (i) remove Simon Heale as director and Chairman of the Company; (ii) appoint Andrew Knight as director of the Company; (iii) appoint Abdullah Mazrui as a non-executive director of the Company; and (iv) appoint Hisham Halbouny as a non-executive director of the Company, in each case with effect from the end of the Requisitioned General Meeting.

On 18 February 2019, the Board received various letters from Ithmar Capital Partners Limited and other shareholders (the "Ithmar Requisitionists") requesting that the Directors convene a general meeting of the Company, proposing an ordinary resolution to appoint Faisal Bin Juma Belhoul as a director of the Company and requesting that such resolution be considered by Shareholders at the Requisitioned General Meeting.

In order to avoid the increased disruption and to minimize the costs of holding multiple general meetings of the Company and to enable Shareholders to determine the Ithmar Requisition expeditiously, the Board has included the Ithmar Resolution for consideration by Shareholders at the Requisitioned General Meeting as set out in this document.

The Requisitioned General Meeting will be held at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ at 9.00 a.m. on Monday, 18 March 2019.

The Views of the GMS Board

The Board recognises Shareholders' concerns about the operational performance, capital structure and governance of the Company and the importance of taking concrete action to address all of these issues as a matter of urgency. The Board has already taken initial steps to address the challenges facing the Company, as described in further detail in the Circular to shareholders, which will form part of a larger, comprehensive plan to re-position the Company and optimise its future prospects.

The Board believes that the appointments of Stuart Jackson and Mo Bississo to the Board, as announced on 14 February 2019, will significantly strengthen the governance and management of the Company, providing deep knowledge of capital restructuring in the oilfield services sector and expertise in the UAE financial sector, in particular, both of which will be helpful in our engagement with the Company's local banking syndicate.

On 11 February 2019, the Company announced that the Chair has notified the Board of his intention to stand down as Chair and Director of the Company once a suitable replacement has been found. Spencer Stuart has been appointed to start conducting the search process for a new Chair, and the Senior Independent Non-Executive Director will lead this process on behalf of GMS. The search will seek a Chair who has UK public market and sector experience, and who will have a particular focus on securing a stable capital base for the business that will enable all Shareholders to benefit from future market recovery. The Board is targeting the appointment of a new Chair by the time of the AGM in May 2019.

The Board has also indicated its willingness to consider the appointment of new non-executive director(s) that would be additive to the skills, experience, and knowledge of the Board, but believes that any such appointments should follow the appointment of the new Chair.

The Board firmly believes that maintaining the highest standards of corporate governance will be critical to the future success of the Company. This includes a formal, rigorous and transparent procedure for the appointment of new directors, with such appointments made on merit against objective criteria, as well as ensuring that the Board is balanced, appropriate in number and compliant with the UK Corporate Governance Code.

In this context, the Board believes that the appointment of the four nominees put forward by Seafox and the Ithmar Requisitionists would create an unwieldy, non-compliant Board and, in particular, the appointment of the Seafox Nominees would raise significant concerns about a direct competitor having access to sensitive commercial information as well as influence over the operations of the Company's business. The Board has received very limited information in relation to any of the individuals proposed by Seafox or the Ithmar Requisitionists and no basis on which to assess their independence, qualifications and suitability to act as directors of a UK listed company.

The Board believes that Seafox has made a number of poor strategic investment decisions, and has had limited success in developing an attractive fleet of vessels, and that, aside from the obvious conflict of interest, representation from Seafox on the Company's Board would not be additive to the existing skills and knowledge of our directors.

The Board has always been, and will continue to be, open to dialogue with all GMS Shareholders. It has made more than reasonable efforts to engage with Seafox in relation to the resolutions that Seafox has proposed. In the Board's opinion, however, the resolutions are wholly unnecessary and there is no evidence that any of the proposed directors would add any value to, or would introduce significant enhancements or improvements to, the Board and governance structure of the Company as it currently stands.

Instead, the proposals would reduce the independence of the Board, jeopardise the successful implementation of new operational initiatives and long-term financing solutions, and risk serious and long-standing damage to GMS's competitive position.

The requisitions from Seafox and the Ithmar Requisitionists have caused unnecessary expense, uncertainty and disruption to the operations of the business at a critical time when the Board is focused on the trading performance and the ongoing work to strengthen the capital base of the Company.

Accordingly, the Board is unanimously recommending that shareholders VOTE AGAINST all of the resolutions.

Further details regarding the above points can be found in the Senior Independent Non-Executive Director's letter starting on page 6 of the Circular.

The Circular and a Form of Proxy for voting at the General Meeting are being posted to Shareholders today and will also be made available to view shortly on the Company's website, www.gmsuae.com.

The above summary should be read in conjunction with the full text of this announcement below and the Circular. Extracts from the Circular are set out below. Defined terms used in this announcement have the meaning as set out at the end of this announcement and as set out in the Circular.

This announcement contains inside information and is provided in accordance with the requirements of Article 17 of the EU Market Abuse Regulation.

John Brown

Company Secretary (responsible for arranging the release of this announcement)

Gulf Marine Services PLC

22 February 2019

Enquiries

For further information please contact: 

Extracts from the Circular

(References to pages or paragraphs and appendices below refer to the relevant pages, paragraphs or appendices of the Circular and references to 'this document' refer to the Circular).

Expected timetable of events

Date of this document Friday, 22 February 2019

Latest time and date for receipt of completed Forms of Proxy 9.00 a.m. on Thursday, 14 March 2019 Requisitioned General Meeting 9.00 a.m. on Monday, 18 March 2019

Other than the date of this document, each of the times and dates in the table above is indicative only and may be subject to change. If any of the details contained in the timetable above should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service. References to times in this document are to London time unless stated otherwise.

Letter from the Senior Independent Non-Executive Director

Dear Shareholder

Notice of Requisitioned General Meeting

1 Introduction

On 1 February 2019, your Board received the Seafox Requisition requesting that the Directors convene a general meeting of the Company to propose four ordinary resolutions to: (i) remove Simon Heale as director and Chairman of the Company; (ii) appoint Andrew Knight as director of the Company; (iii) appoint Abdullah Mazrui as a non-executive director of the Company; and (iv) appoint Hisham Halbouny as a non-executive director of the Company (Andrew Knight, Abdullah Mazrui and Hisham Halbouny together, the "Seafox Nominees"), in each case with effect from the end of the Requisitioned General Meeting.

Subsequently, on 18 February 2019, the Board received the Ithmar Requisition requesting the Directors convene a general meeting of the Company, proposing an ordinary resolution to appoint Faisal Bin Juma Belhoul as a director of the Company and requesting that the Company include such resolution to be considered by Shareholders at the Requisitioned General Meeting. In order to avoid the increased disruption and expense of holding multiple general meetings of the Company and to enable Shareholders to determine the Ithmar Requisition expeditiously, the Board has included the Ithmar Resolution for consideration by Shareholders at the Requisition General Meeting as set out in this document.

We are writing to you to:

• provide notice that the Requisitioned General Meeting is to be held at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ at 9.00 a.m. on Monday, 18 March 2019; and

• explain why the Directors unanimously recommend that you VOTE AGAINST the Seafox and Ithmar Resolutions.

The Board recognises Shareholders' concerns about the operational performance, capital structure and governance of the Company and the importance of taking concrete action to address all of these issues as a matter of urgency. The Board has already taken initial steps to address the challenges facing the Company, as described in further detail in section 3 below. These steps will form part of a larger and comprehensive plan to re-position the Company and optimise its future prospects.

The Board firmly believes that maintaining the highest standards of corporate governance will be critical to the future success of the Company. This includes a formal, rigorous and transparent procedure for the appointment of new directors, with such appointments made on merit against objective criteria, as well as ensuring that the Board is balanced, appropriate in number and compliant with the UK Corporate Governance Code.

In this context, the Board believes that the appointment of the four Seafox and Ithmar Nominees would create an unwieldy, non-compliant Board and, in particular, the appointment of the Seafox Nominees would raise significant concerns about a direct competitor having access to sensitive commercial information as well as influence over the operations of the Company's business.

The Board believes that Seafox has made a number of poor strategic investment decisions and has had limited success in developing an attractive fleet of vessels, and that, aside from the obvious conflict of interest, representation from Seafox on the Board would not be additive to the existing skills and knowledge of our Directors.

Both the Seafox Requisition and the Ithmar Requisition have caused unnecessary expense, uncertainty and disruption to the operations of the business at a critical time when the Board is focused on the trading performance and the ongoing work to strengthen the capital base of the Company.

Your Board unanimously recommends that you VOTE AGAINST all of the Seafox and Ithmar Resolutions.

2 Background

Acquisition of Ordinary Shares by Seafox

On 14 January 2019, Seafox acquired 48,066,480 Ordinary Shares, representing c.13.73% of the total issued share capital of the Company on such date. In the announcement released by Seafox on 14 January 2019 in relation to its purchase of the Ordinary Shares, Seafox noted, among other things, that:

• it intended to acquire up to 25% of the total issued share capital of the Company by purchasing Ordinary Shares from existing Shareholders of the Company;

• it would not, for a period of 60 days (expiring on 15 March 2019), purchase any Ordinary Shares (other than from the Company itself) above 18 pence per share;

• it had been seeking new investment opportunities to deepen its capabilities globally and in light of recent developments at the Company, Seafox had decided to build a strategic shareholding in the Company and would seek that the Board include investor representation; and

• in connection with Rule 2.8 of the City Code on Takeover and Mergers, it did not intend to make an offer for the Company.

As at 20 February 2019, being the latest practicable date prior to the publication of this document, Seafox holds 48,066,480 Ordinary Shares, representing c.13.73% of the total issued share capital of the Company.

Background of Seafox and its competition with the Company

Seafox is a global offshore jack-up company, providing services to support the oil & gas and renewable industries. As stated on Seafox's website, it owns and manages 12 self-elevating jack-up units and operate accommodation & crane support, well testing & workover, transport & installation and decommissioning. Seafox also offers temporary accommodation units for offshore locations and on- board vessels. Seafox is headquartered in The Netherlands and primarily operates in the North Sea and MENA regions.

Seafox is a direct competitor of the Company. In particular, Seafox and the Company overlap in:

• Service offering - both companies provide a similar product offering of accommodation provision for well maintenance, EPC works and renewables to the market;

• Customer bases - both companies target the same leading NOC, IOC and EPC contractors and have competed and do compete for the same tenders; and

• Core-areas of geographic focus - both companies consider the North Sea and MENA regions to be their primary areas of operation, with a number of vessels currently operating in both geographies.

During the second-half of 2018, Seafox and the Company briefly entered into discussions regarding a potential acquisition of certain Seafox vessels by the Company. However, these discussions were terminated after the sale of vessel Seafox 5 to a third party, with the remaining fleet on offer not being considered sufficiently additive to the Company's existing capabilities.

Background to the Seafox Requisition

Subsequent to Seafox's acquisition of their Ordinary Shares on 14 January 2019, the Company received a letter dated 1 February 2019 from Seafox exercising its right to require that the Company convene the Requisitioned General Meeting at which meeting the Seafox Resolutions will be considered.

The Board has engaged Seafox in a dialogue with regard to the Seafox Resolutions to try to constructively address the matters raised by Seafox while ensuring that the composition of the Board would at all times be in compliance with appropriate corporate governance standards and to be able to act in the best interest of all shareholders. In order to try to reach an amicable settlement with Seafox, the Board indicated that it would consider adding Mr Knight to the candidates to be considered by Spencer Stuart for the Chairmanship of the Company and would be prepared to appoint Mr Mazrui as a non-executive director, subject to among other things, proper evaluation of his background and confirmation that he would bring the appropriate qualities to the Board. However, the Board would not be comfortable appointing any individual, including Mr Halbouny, unless it could be satisfied that such individual was independent of Seafox, given it is a direct competitor of the Company.

The Board is disappointed that no agreement could be reached with Seafox. Accordingly, the Board has had no alternative but to progress with the convening of the Requisitioned General Meeting, which it believes to be unnecessary, expensive and disruptive to the operations of the business at a critical time.

Background of the Ithmar Requisitionists

Ithmar is an investment firm headquartered in the UAE with a primary focus on private equity growth and buyout situations. As stated on their website, Ithmar considers themselves as sector agnostic with extensive expertise in the healthcare and education sectors.

The Ithmar Nominee, Faisal Bin Juma Belhoul, is a founder of Ithmar and currently serves as its executive chairman. Mr Belhoul is also a founder of Amanat Holdings PJSC, an integrated healthcare and education listed investment company, and has served as chairman of the board for a number of healthcare and pharmaceutical business groups and associations.

Background to the Ithmar Requisition

Following the Seafox Requisition, Ithmar contacted the Board to express its desire to also appoint a shareholder representative to the Board. As was the case with Seafox, the Board made clear that the appointment of additional directors would need to go through a formal, rigorous and transparent procedure and be made on merit against objective criteria. In addition, based on Ithmar's focus on private equity investments primarily in the healthcare and education sectors and Faisal Bin Juma Belhoul's personal experience being predominantly in those fields, the Board did not believe that the addition of either an Ithmar representative generally, or Mr Belhoul in particular, would be additive to the Board.

Nevertheless, on 18 February 2019, the Board received various letters from the Ithmar Requisitionists requesting that the Company convene a general meeting, proposing the Ithmar Resolution and requesting that the Ithmar Resolution be included for consideration by Shareholders at the Requisitioned General Meeting.

For the reasons noted above, the Board is disappointed that the Ithmar Requisitionists have requisitioned and proposed the Ithmar Resolution for Shareholders to consider the appointment of Mr Belhoul as a director of the Company at the Requisitioned General Meeting. However, in the interests of minimising costs and to avoid increased disruption of holding multiple general meetings of the Company, the Board has decided to include the Ithmar Resolution to be considered at the Requisitioned General Meeting.

As at 20 February 2019, the Ithmar Requisitionists have demonstrated that they, together, hold 20,051,082 Ordinary Shares, representing c.5.7% of the total issued share capital of the Company.

3 Recent Actions Taken by the Board

The Board recognises shareholder concerns about the recent performance of the business, including the Trading Update in December 2018 regarding the Group's ability to service its scheduled increased debt repayments from 2020 onwards and the potential breach of certain banking covenants at the end of 2018 combined with the expected deferral of a near-term market-wide recovery in charter rates.

The Board remains confident in the quality of the Company's assets as well as their operational capability and firmly believes that the strong pipeline of contract tenders in the Middle East in particular has already led to improved utilisation which will in turn drive an increase in charter rates over time. The Group's fleet is one of the youngest and most well invested in the industry, with an expected future useful life of more than 25 years, which means GMS is well placed to capitalise on a market recovery when it materialises.

However, the Board acknowledges the need for a comprehensive plan to ensure the Company is well positioned for the future regardless of the market environment. In particular, the Board recognises the importance of a clear strategy to ensure optimal operational performance, a stable and appropriate long-term capital structure and suitable governance arrangements.

Since the Trading Update, the Board has taken the following actions to address the challenges facing the Company:

• Initiated an operational review of the principal activities across the Company split across two primary workstreams: (i) Utilisation and Revenue; and (ii) Costs and Margins

Effective deployment of the Company's vessels at appropriate operating margins is the primary purpose of the Company and the Board continues to seek to improve and optimise this process.

The Company has announced two new contracts in 2019 and its backlog (including options) will increase to more than US$260 million (31 August 2018: US$121 million) once all currently awarded charters have commenced.

The Board continues to prioritise the evaluation of the Company's business to identify new areas to reduce costs and improve efficiency while maintaining its competitive edge. This will represent a third round of cost saving initiatives in the last four years.

• Engaged with the Company's banking syndicate both to address the near term covenant pressure and to establish an appropriate long-term sustainable capital structure to avoid further financing constraints

The first objective has already been achieved through the agreement with the banking syndicate of an amendment to the financial covenant schedule for the year ended 31 December 2018 and, accordingly, the Board expects the Group to be in full compliance with all of its covenants when they are tested against its audited 2018 financial results.

The Company now has more than six months until the next covenant tests are reported and continues to work closely with the banking syndicate around covenant compliance as well as a longer term solution for the capital structure.

• Taken steps to refresh the Board and management composition in order to strengthen the leadership of the business and provide appropriate governance and oversight

Announced that Simon Heale has notified the Board of his intention to step down as Chairman and Director of the Company once a suitable replacement has been found. The Board has since then commenced a search for a new Chair who has UK public market and sector experience, and who will have a particular focus on securing a stable capital base for the business that will enable all Shareholders to benefit from a future market recovery. This process is being led by as the Senior Independent Non-Executive Director. Spencer Stuart has been appointed to conduct the search process to identify an appropriate candidate as soon as is practicable and the Board is targeting the appointment of the new Chair by the time of the AGM in May 2019.

Announced the appointment of Stuart Jackson as Chief Financial Officer ("CFO") effective from early summer 2019. Mr Jackson has been CFO of London Stock Exchange, NASDAQ, OSE and AIM listed companies for the past 20 years. He has more than 30 years' experience in the international energy sector covering exploration & production, power generation and offshore services, and at CFO level has led the successful capital restructuring of a number of businesses including CEONA Pte, Bibby Offshore Holdings Limited and Acergy SA (now Subsea 7). In addition to his strong track record in the EPC, IMR and offshore engineering sectors, Mr Jackson has also held CFO roles in the telecommunications and pharmaceutical industries. Mr Jackson is a Fellow of the Chartered Institute of Management Accountants and has a BSc (Hons) degree in Accounting and Financial Management from Loughborough University. Mr Jackson will take over as CFO from John Brown in early summer 2019 and, in accordance with standard UK market practice, will join the Board as an executive director at that time.

Announced the appointment of Mohammed Bississo as a Non-Executive Director of the Company with effect from March 2019. Mr Bississo currently co-heads Kasamar Holdings, an Abu Dhabi-based family office that owns 9.82% of GMS through Castro Investments Ltd. He previously spent more than six years at one of the leading mid-market alternative investments firms, based in Abu Dhabi, UAE, as a member of the private equity group. Mr Bississo has a BSc in Computer Science from the University of California Irvine, and an MBA from Duke University. Mr Bississo brings significant financial and capital markets experience to the Board and excellent relationships with local capital providers including but not limited to key members of the Company's banking syndicate. Mr Bississo has also confirmed to the Board that he will waive the payment by the Company of his fees as Non-Executive Director upon his appointment becoming effective.

The Board believes that the new appointments it has made significantly strengthen the governance and management of the Company, providing deep knowledge of capital restructuring in the oilfield services sector and expertise in the UAE financial sector, in particular, both of which will be helpful in our engagement with the Company's local banking syndicate. The Board has also indicated its willingness to consider the appointment of new non-executive director(s) that would be additive to the skills, experience, and knowledge of the Board, but believes that any such appointments should follow the appointment of the new Chair, which the Board is targeting to be on or before the AGM in May 2019.

All the actions set out above form part of a larger plan to reposition the Company and optimise its future prospects, which is being prepared by the Board and Management. The Board expects to give further details of this plan following the appointment of the new Chair and in the interim will continue to update investors of major developments as appropriate.

4 Reasons for the Board's Recommendation to Vote Against the Seafox and Ithmar Resolutions

Your Board unanimously recommends that you VOTE AGAINST the Seafox and Ithmar Resolutions.

The Board remains firmly committed to robust and responsible corporate governance, and recognises that this is essential to promote investor confidence and is a prerequisite for the long term success of the Company.

The UK Corporate Governance Code requires listed companies to have a formal, rigorous and transparent procedure for the appointment of new directors, and the search for board candidates should be conducted, and appointments made, on merit against objective criteria. In addition, it provides that boards of directors of listed companies should have the appropriate balance of skills, experience, independence and knowledge to enable them to effectively discharge their duties and responsibilities as directors.

The Board believes that, in order to be effective and efficient, the number of directors should not be increased beyond the point at which the Board becomes unwieldy and expensive to operate and rapid decision-making is compromised. In addition, the Board believes that all new directors should be appropriately assessed by the Nomination Committee or the full Board to ensure that they will be additive to the skills and experience of the Board and that their appointment will be in the interests of all Shareholders.

The Board has received very limited information in relation to any of the individuals proposed by Seafox or the Ithmar Requisitionists and has no basis on which to assess their independence, qualifications and suitability to act as directors of a UK listed company or, particularly in light of a number of poor strategic investment decisions which Seafox has made, whether they would add anything to the Board's existing capabilities.

As noted above, the Board considers Seafox to be a direct competitor of the Company. The Board has not had the opportunity to establish whether any of the Seafox Nominees are independent of Seafox. The Board believes that Mr Halbouny in particular is closely associated with Seafox and one of its major shareholders and that Mr Knight was previously a board member of Seafox. The Board believes that the appointment to the Board of any individual who is associated with a direct competitor to be fundamentally inappropriate and potentially damaging to the business.

In addition, the Board believes that at least Mr Mazrui and Mr Halbouny, and potentially Mr Knight and Mr Belhoul, would not be considered to be independent directors for the purposes of the UK Corporate Governance Code.

Accordingly, if the Seafox and Ithmar Resolutions were passed, this would result in the Board ceasing to be compliant with the UK Corporate Governance Code, as it would contain seven directors who may be considered non-independent and potentially only three independent directors (following Stuart Jackson and Mohammed Bississo taking up their appointments), which is four non-independent directors more than the minimum level of corporate governance standards requiring at least half the Board to be independent.

The Board believes that to successfully implement the changes to the business required to best position the Company for the future, as outlined above, it will be vital that the Company maintains the highest standards of corporate governance and, in particular, that any new director appointments should follow proper procedures once the new Chair has been appointed.

The Board believes that the appointment of four new directors at the behest of Seafox and the Ithmar Requisitionists would fundamentally undermine the governance of the Company.

Accordingly, the Board is recommending that Shareholders VOTE AGAINST all of the Seafox and Ithmar Resolutions.

The Board considers each of the Seafox and Ithmar Resolutions as unnecessary and inappropriate for the following reasons:

• Seafox Resolution 1: Remove Simon Heale as director and Chairman of the Company with effect from the end of the Requisitioned General Meeting.

As announced by the Company on 11 February 2019, Simon Heale has already notified the Board of his intention to step down as Chair and Director of the Company once a suitable replacement has been found. The Board has already commenced a search for a new Chair, led by myself as the Senior Independent Non-Executive Director. The Seafox proposal would have the effect of removing Simon Heale at the end of the Requisitioned General Meeting. The Board believes the current Chair should only step down once the formal search process has concluded and a new candidate has been identified to avoid any further disruption to the operation and decision making process of the Company. Accordingly, the Board recommends that Shareholders  VOTE AGAINST Seafox Resolution 1.

• Seafox Resolution 2: Appoint Andrew Knight as director of the Company with effect from the end of the Requisitioned General Meeting.

Seafox has previously indicated that their wish is for Andrew Knight to take the role of Chair to replace Simon Heale. The Board believes that Mr Knight has limited experience that would be useful to the Company and therefore would not be an appropriate candidate to join as a member of the Board in any capacity, director or otherwise.

The Board believes that the appointment of the new Chair should follow an orderly process conducted in accordance with best practice. The new candidate should have the appropriate balance of skills, experience, independence and knowledge to enable them to discharge their duties and responsibilities as Chair effectively and command the respect and confidence of allShareholders. Spencer Stuart has been appointed to conduct a search process and the Board is targeting the appointment of a new Chair by the AGM in May 2019.

As to the appointment of Mr Knight as a director, the Board has, as set out above, indicated that following the appointment of the new Chair, it would be prepared to consider the appointment of a new non-executive director if this was additive to the existing skills and experience of the Board. The Board would consider appropriately qualified candidates for such a position, based on a proper assessment of their background, an evaluation of the skills and experience they would bring, their willingness to commit sufficient time to the business to discharge the responsibilities of a director appropriately and, where relevant, being satisfied as to their independence from Seafox or other competitors of the business. At present the Board is not satisfied on any of these matters in relation to Mr Knight. Accordingly, the Board recommends  that Shareholders VOTE AGAINST Seafox Resolution 2.

• Seafox Resolution 3: Appoint Abdullah Mazrui as a non-executive director of the Company with effect from the end of the Requisitioned General Meeting.

As set out above, the Board has indicated that, following the appointment of the new Chair, it would be prepared to consider the appointment of a new non-executive director if this was additive to the existing skills and experience of the Board. The Board would be prepared to consider appropriately qualified candidates for such a position, based on a proper assessment of his background, an evaluation of the skills and experience he would bring, his willingness to commit sufficient time to the business to discharge the responsibilities of a director appropriately and being satisfied as to his independence from Seafox. At present the Board is not satisfied on any of these matters. Pending the appointment of the new Chair, and a proper evaluation of Mr Mazrui's suitability for the role, the Board recommends that Shareholders VOTE AGAINST  Seafox Resolution 3.

• Seafox Resolution 4: Appoint Hisham Halbouny as a non-executive director of the Company with effect from the end of the Requisitioned General Meeting.

The Board believes that Hisham Halbouny is currently a board member of Seafox and closely associated with one of Seafox's major shareholders. The Board believes that the appointment of Mr Halbouny to the Board would create unacceptable conflicts of interest.

As noted above, the Board considers Seafox to be a direct competitor of GMS. In addition, the Board believes that Seafox has made a number of poor strategic investment decisions, with limited success in developing an attractive fleet of vessels. As a result, the Board considers the appointment of Mr Halbouny to be inappropriate, contrary to good corporate governance and potentially damaging to the interests of the business and its Shareholders. In particular, this appointment could result in the sharing of sensitive commercial information with and influence on the operations of GMS from a direct competitor, both of which could be prejudicial to the performance of the Company. As a consequence, the Board is deeply concerned that the interests of the other Shareholders will be potentially disadvantaged by this proposal.  Accordingly, the Board recommends that Shareholders VOTE AGAINST Seafox Resolution 4.

• Ithmar Resolution: Appoint Faisal Bin Juma Belhoul as a director of the Company.

As set out above, the Board has indicated that, following the appointment of the new Chair, it would be prepared to consider the appointment of a new non-executive director if this was additive to the existing skills and experience of the Board. The Board would be prepared to consider appropriately qualified candidates, for such a position, based on a proper evaluation of his background, an assessment of the skills and experience he would bring and his willingness to commit sufficient time to the business to discharge the responsibilities of a director appropriately. At present the Board is not satisfied on any of these matters. Pending the appointment of the new Chair, and a proper evaluation of Mr Belhoul's suitability for the role, the  Board recommends that Shareholders VOTE AGAINST the Ithmar Resolution.

The Board has always been, and will continue to be, open to dialogue with all Shareholders. It has made more than reasonable efforts to engage with Seafox in relation to the Seafox Resolutions. In the Board's opinion, the Seafox and Ithmar Resolutions proposed by Seafox and the Ithmar Requisitionists are wholly unnecessary and there is no evidence that they would add any new value to, or would introduce significant enhancements or improvements to, the Board and governance structure of the Company as it currently stands.

Instead, the appointment of the Seafox and Ithmar Nominees would reduce the independence of the Board, jeopardise the successful implementation of new operational initiatives and long- term financing solutions, and risk serious and long-standing damage to GMS's competitive position.

5 The Requisitioned General Meeting

Set out at the end of this document is a notice convening the Requisitioned General Meeting of the Company to be held at the offices of the Company's solicitors, Linklaters LLP, One Silk Street, London EC2Y 8HQ at 9.00 a.m. on Monday, 18 March 2019, at which the Seafox and Ithmar Resolutions will be proposed.

The Seafox and Ithmar Resolutions are each ordinary resolutions as set out in the notice of the Requisitioned General Meeting on page 16 of this document.

The Directors unanimously consider that the Seafox and Ithmar Resolutions are NOT in the best interests of the Company or its Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders VOTE AGAINST each of the Seafox and Ithmar Resolutions to be proposed at the Requisitioned General Meeting.

6 Action to be Taken

Shareholders will find enclosed with the Notice in this document a Form of Proxy for use in connection with the Requisitioned General Meeting. Whether or not you intend to be present at the Requisitioned General Meeting, you are urged to complete, sign and return the Form of Proxy in accordance with the instructions printed thereon as soon as possible, but in any event so as to be received by post or, during normal business hours only, by hand, by the Registrar, Equiniti Limited, at Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, as soon as possible and by no later than 9.00 a.m. on Thursday, 14 March 2019 (or, in the case of an adjournment of the Requisitioned General Meeting, not later than 48 hours before the time fixed for the holding of the adjourned meeting (excluding any part of a day that is not a Business Day)). If you are posting your completed Form of Proxy, you may do so using the pre-paid envelope provided.

Appointing a proxy in accordance with the instructions set out above will enable your vote to be counted at the Requisitioned General Meeting in the event of your absence. The completion and return of the Form of Proxy will not prevent you from attending and voting at the Requisitioned General Meeting, or any adjournment thereof, in person should you wish to do so.

7 Recommendation

For the reasons given above, the Directors unanimously consider that the Seafox and Ithmar Resolutions are NOT in the best interests of the Company or its Shareholders as a whole. Accordingly, the Board therefore unanimously recommend that Shareholders VOTE AGAINST each of the Seafox and Ithmar Resolutions to be proposed at the Requisitioned General Meeting.

Yours faithfully

Simon Batey

Senior Independent Non-Executive Director

Definitions

The following definitions apply throughout this document and the accompanying Form of Proxy, unless

the context requires otherwise.

Notice of General Meeting

NOTICE IS HEREBY GIVEN that a general meeting (the "Requisitioned General Meeting") of Gulf Marine Services PLC (the "Company") will be held at the offices of the Company's solicitors, Linklaters LLP, One Silk Street, London EC2Y 8HQ at 9.00 a.m. on 18 March 2019 for the purpose of considering the ordinary resolutions below (each a "Resolution").

Resolutions number 1 to 4 have been requisitioned pursuant to section 303 of the Companies Act 2006 by Seafox International Limited, the registered holder of c.13.73 per cent. of the paid-up capital of the Company carrying voting rights at general meetings of the Company.

Resolution number 5 has been requisitioned pursuant to section 303 of the Companies Act 2006 by Ithmar Capital Partners Limited and a consortium of shareholders holding, in aggregate, c.5.7% per cent. of the paid-up capital of the Company carrying voting rights at general meetings of the Company.

REQUISITIONED ORDINARY RESOLUTIONS

1 THAT pursuant to section 168 of the Companies Act 2006 and article 61 of the Company's articles of association, Simon Heale be removed as director and Chairman of the Company with effect from the end of the Requisitioned General Meeting.

2 THAT Andrew Knight, having consented to act, be appointed as director of the Company with effect from the end of the Requisitioned General Meeting.

3 THAT Abdullah Mazrui, having consented to act, be appointed as a non-executive director of the Company with effect from the end of the Requisitioned General Meeting.

4 THAT Hisham Halbouny, having consented to act, be appointed as a non-executive director of the Company with effect from the end of the Requisitioned General Meeting.

5 THAT Mr. Faisal Bin Juma Belhoul be and is hereby appointed as a director of the Company. By order of the Board

John Brown

Company Secretary

Dated: 22 February 2019

Registered office:

6th Floor

65 Gresham Street London

EC2V 7NQ

Registered in England and Wales with number 08860816

NOTES TO THE NOTICE OF REQUISITIONED GENERAL MEETING

1 To be entitled to attend and vote at the Requisitioned General Meeting (and for the purpose of the determination by the Company of the number of votes they may cast), Shareholders must be registered in the register of members of the Company at 6.30 p.m. (UK time) on 14 March 2019 (or, in the event of any adjournment, 6.30 p.m. (UK time) on the date which is two business days before the time of the adjourned meeting). Changes to the register of members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the Requisitioned General Meeting. There are no other procedures or requirements for entitled Shareholders to comply with in order to attend and vote at the Requisitioned General Meeting. In alignment with best practice for UK listed companies, it is the current intention that each of the resolutions to be put to the Requisitioned General Meeting will be voted on by way of a poll and not by show of hands. The Company believes that a poll is more representative of Shareholders' voting intentions because shareholder votes are counted according to the number of ordinary shares held and all votes tendered are taken into account.

2 The doors will open at 8.00 a.m. (UK time) and you are recommended to arrive by 8.30 a.m. (UK time) to enable you to register and take your seat in good time. Light refreshments will be provided at the Requisitioned General Meeting. If you have any special needs or require wheelchair access to the offices of Linklaters LLP please contact Leanne Shergold by email on lshergold@brunswickgroup.com or telephone +44 (0)20 7396 7480 in advance of the Requisitioned General Meeting. Mobile phones may not be used in the meeting hall, and cameras and recording equipment are not allowed in the meeting hall.

3 Members are entitled to appoint a proxy to exercise all or part of their rights to attend and to speak and vote on their behalf at the Requisitioned General Meeting. A shareholder may appoint more than one proxy in relation to the Requisitioned General Meeting, provided that each proxy is appointed to exercise the rights attached to a different ordinary share or ordinary shares held by that shareholder. A proxy need not be a shareholder of the Company. A form of proxy which may be used to make such appointment and give proxy instructions accompanies this Notice. If you do not have a form of proxy and believe that you should have one, or if you require additional forms, please contact the Company's registrar, Equiniti Limited (the "Registrar"), on 0371 384 2030 (or from outside the UK: +44 (0) 121 415 7047). Lines are open from 8.30 a.m. to 5.30

p.m. (UK time) Monday to Friday, excluding public holidays in England and Wales.

4 In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first named being the most senior).

5 Any person to whom this Notice is sent who is a person nominated under section 146 of the Companies Act 2006 (the "Act") to enjoy information rights (a "Nominated Person") may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Requisitioned General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.

6 The statement of the rights of Shareholders in relation to the appointment of proxies in notes 3, 4 and 9 do not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by Shareholders of the Company.

7 Members meeting the threshold requirements set out in the Act have the right, subject to certain conditions, to: (a) require the Company to give notice of any resolution which can properly be, and is to be, moved at the Requisitioned General Meeting pursuant to section 338 of the Act; and/or (b) include a matter in the business to be dealt with at the Requisitioned General Meeting, pursuant to section 338A of the Act.

8 A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Requisitioned General Meeting.

9 To be valid, any form of proxy or other instrument appointing a proxy must be received by the Registrar by post or (during normal business hours only) by hand at the address shown on the form of proxy, by e-mail by sending a scanned copy of your completed proxy form to proxyvotes@equiniti.com or, in the case of shares held through CREST, via the CREST system (see note 11 below). For proxy appointments to be valid, they must be received by no later than 9.00 a.m. (UK time) on 14 March 2019. If you return more than one proxy appointment, the proxy appointment received last by the Registrar before the latest time for the receipt of proxies will take precedence. You are advised to read the terms and conditions of use carefully. Electronic communication facilities for the receipt of any document or information on proxies are open to all Shareholders and those who use them will not be disadvantaged.

10 The return of a completed form of proxy or any CREST Proxy Instruction (as described in note 12 below) will not prevent a shareholder attending the Requisitioned General Meeting and voting in person if he or she wishes to do so.

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Requisitioned General Meeting (and any adjournment of the Requisitioned General Meeting) by using the procedures described in the CREST Manual (available from www.euroclear.com). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. ln order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuers' agent (ID RA19) by 9.00 a.m. (UK time) on 14 March 2019. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST application host) from which the issuers agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

11 CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK

& Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

12 Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member, provided that no more than one corporate representative exercises powers in relation to the same shares.

13 As at 20 February 2019 (being the latest practicable date prior to the publication of this Notice), the Company's ordinary issued share capital consists of 349,967,878 ordinary shares, carrying one vote each. No shares are held in treasury. Therefore, the total voting rights in the Company as at 20 February 2019 are 349,967,878.

14 Any shareholder attending the Requisitioned General Meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the Requisitioned General Meeting, but no such answer need be given if (a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.

15 You may not use any electronic address provided in either this Notice or any related documents (including the form of proxy) to communicate with the Company for any purposes other than those expressly stated.

16 A copy of this Notice, and other information required by section 311A of the Act, can be found on the Company's website at  http://www.gmsuae.com

-ENDS-

Notes to Editors:

Gulf Marine Services PLC, a company listed on the London Stock Exchange, was founded in Abu Dhabi in 1977 and has become the world's leading provider of advanced self-propelled self-elevating support vessels (SESVs). The fleet serves the oil, gas and renewable energy industries from its offices in the United Arab Emirates, Saudi Arabia and the United Kingdom. The Group's assets are capable of serving clients' requirements across the globe, including those in the Middle East, South East Asia, West Africa and Europe.

The GMS core fleet of 13 SESVs is amongst the youngest in the industry, with an average age of eight years. The vessels support GMS' clients in a broad range of offshore oil and gas platform refurbishment and maintenance activities, well intervention work and offshore wind turbine maintenance work (which are opex-led activities), as well as offshore oil and gas platform installation and decommissioning and offshore wind turbine installation (which are capex-led activities).

The SESVs are categorised by size - Small, Mid-Size and Large Class - with these capable of operating in water depths of 45m to 80m depending on leg length. The vessels are four-legged and are self-propelled, which means they do not require tugs or similar support vessels for moves between locations in the field; this makes them significantly more cost-effective and time-efficient than conventional offshore support vessels without self-propulsion. They have a large deck space, crane capacity and accommodation facilities (for up to 300 people) that can be adapted to the requirements of the Group's clients. In addition, an innovative well workover cantilever system commissioned on a Large Class SESV in 2017 allows GMS to increase the well intervention activities carried out from the vessel and to supplant higher cost non-propelled drilling rigs. 

Gulf Marine Services PLC's Legal Entity Identifier is 213800IGS2QE89SAJF77

www.gmsuae.com

Disclaimer

The content of the Gulf Marine Services PLC website should not be considered to form a part of or be incorporated into this announcement.

Cautionary Statement

This announcement includes statements that are forward-looking in nature. All statements other than statements of historical fact are capable of interpretation as forward-looking statements. These statements may generally, but not always, be identified by the use of words such as 'will', 'should', 'could', 'estimate', 'goals', 'outlook', 'probably', 'project', 'risks', 'schedule', 'seek', 'target', 'expects', 'is expected to', 'aims', 'may', 'objective', 'is likely to', 'intends', 'believes', 'anticipates', 'plans', 'we see' or similar expressions. By their nature these forward-looking statements involve numerous assumptions, risks and uncertainties, both general and specific, as they relate to events and depend on circumstances that might occur in the future.

Accordingly, the actual results, operations, performance or achievements of the Company and its subsidiaries may be materially different from any future results, operations, performance or achievements expressed or implied by such forward-looking statements, due to known and unknown risks, uncertainties and other factors. Neither Gulf Marine Services PLC nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. No part of this announcement constitutes, or shall be taken to constitute, an invitation or inducement to invest the Company or any other entity, and must not be relied upon in any way in connection with any investment decision. All written and oral forward-looking statements attributable to the Company or to persons acting on the Company's behalf are expressly qualified in their entirety by the cautionary statements referred to above.