TIDMGED
RNS Number : 1907U
Global Energy Development PLC
16 January 2017
Immediate Release 16 January 2017
GLOBAL ENERGY DEVELOPMENT PLC
(the "Company" or "Global")
PROPOSED REVERSE TAKEOVER
PROPOSALS TO ACQUIRE SUBSEA SERVICE VESSEL OWNING COMPANIES
AND TO CHANGE NAME TO NAUTILUS MARINE SERVICES PLC
APPOINTMENT OF EXPERIENCED OFFSHORE ENERGY SERVICES OPERATIONS
DIRECTOR
Global Energy Development PLC (AIM: GED), is pleased to announce
that it has today conditionally agreed to purchase 11 offshore
subsea service vessels and a barge vessel as it seeks to adopt a
new business strategy focusing on the subsea oilfield services
sector.
Highlights
General
-- Global has entered into two share purchase agreements to
acquire a total of 11 offshore service vessels, a barge vessel and
other related equipment through the purchase of 100 per cent of the
issued shares in vessel-owning companies
-- All vessels are currently located in Louisiana USA with
direct access to the offshore oil and gas fields in the Gulf of
Mexico
-- The acquisitions will mark a fundamental change in Global's
business strategy as these transactions are the Company's first
step into the global subsea industry. The Company seeks to make
counter-cyclical investments within the global subsea industry that
will enable it to capitalise on future recoveries in the oil price
and related increased requirements for offshore support
services
-- Vessels will be able to operate in depths of up to 300 feet
and, in the case of one vessel up to 5,000 feet, opening a large
addressable market for the Company
-- Global to issue Convertible A Loan Notes for near-term cash
injection of $10.5m resulting in a strengthened balance sheet with
which to further pursue the new business strategy
-- Convertible A Loan Notes of $10.5m when fully issued have a
50p conversion price, coupon of 8 per cent. and a maturity date of
1 January 2027
-- Proposal to change name to Nautilus Marine Services PLC to reflect new business strategy
-- Transactions represent a reverse takeover that will be
subject to a vote of Global's shareholders
Transaction "A"
-- Conditional agreement to acquire three vessels from Everest
Hill Group Inc. through the purchase of all of the issued shares in
three vessel-owning companies;
-- Consideration for these vessels shall comprise of $8 million
upfront which shall be satisfied through the forgiveness of $8
million of the principal amount of the existing $12 million secured
loan note agreement ("Loan Note");
-- Amendment of the terms of the Loan Note to provide for a
reduced interest charge from 12 per cent. to 8 per cent. per annum,
payable semi-annually in arrears, and an extended maturity date of
15 September 2018;
-- Contingent additional consideration equal to the lower of
$5.0 million or 75 per cent of the net cash flows (defined as
turnover less direct and allocated operational, general and
administrative costs, taxes, insurance and capital expenditures)
attributable to these vessels for the period of eighteen full
calendar months following the completion date to be satisfied as
follows:
o To be applied in repaying all or part of the then outstanding
principal amount of the amended Loan Note; and
o Any remaining balance (if any) to be settled in cash (or as
otherwise agreed);
-- The vessels and shares of the vessel-owning companies are to
be delivered free from all liens, encumbrances, charters, mortgages
and maritime liens. These vessel-owning companies hold no other
assets other than the three vessels and they hold no
liabilities.
Transaction "B"
-- Conditional agreement to receive $10.5 million in new cash
proceeds (for the issue of Convertible A Loan Notes) and to acquire
eight vessels, a barge vessel and other equipment through the
purchase of all of the issued shares in two vessel-owning companies
from McLarty Capital Partners, Caleura Limited and Mr. Alan
Quasha;
-- Consideration for the companies to be satisfied by the
issuance of Convertible B Loan Notes and Convertible C Loan
Notes;
-- Convertible A Loan Notes of $10.5 million when fully issued
have a 50p conversion price, coupon of 8 per cent. and a maturity
date of 1 January 2027;
-- Convertible B Loan Notes of $6.1m when fully issued have a
160p conversion price, coupon of 6 per cent. and a maturity date of
1 January 2029;
-- Convertible C Loan Notes of $15.0m when fully issued have a
225p conversion price, coupon of 6 per cent. and a maturity date of
1 January 2032.
-- The vessels and shares of the vessel-owning companies are to
be delivered free from all liens, encumbrances, charters, mortgages
and maritime liens. These vessel-owning companies hold no other
assets other than the vessels and equipment and they hold no
liabilities.
Director of Operations
Global also announces the appointment of John Payne as Director
of Operations. John, a qualified Master Mariner with over 25 years'
experience in the subsea sector, has managed global marine
businesses in the offshore energy, renewables and subsea telecoms
sectors. During his international career he has held senior
positions in service delivery, operations and business development
and brings this combined capability to his new role with Global.
Recently John held positions as Chief Operating Officer at Aubin
Ltd., an Aberdeen based global specialist chemical provider to the
Oil and Gas sector and as interim Chief Executive Officer at Hallin
Marine, a global subsea services provider based in South East
Asia.
Mikel Faulkner, Chairman of the Company, commented:
"We are very pleased to have committed to these acquisitions of
the offshore service vessels in the Gulf of Mexico. This represents
the Company's first step towards delivering on the Company's new
strategy of increasing shareholder value by targeting investment
and acquisition opportunities in the subsea services sector with
the potential for significant upside.
We are also delighted to welcome someone of John's experience to
the Global management team. He is a good strategic fit for the
business and his knowledge and experience will be of immense
benefit as we embark on this new business strategy, especially
considering his long and successful track record in the off-shore
energy marine sector."
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Enquiries:
Global Energy Development PLC
Anna Williams, Director of Strategy +1 817 424 2424, ext
and Business Development 110
awilliams@globalenergyplc.com
www.globalenergyplc.com
finnCap LtdChristopher Raggett/Scott Mathieson/Kate
Bannatyne (Corporate Finance) 0207 220 0500
Emily Morris (Corporate Broking)
Abchurch
Tim Thompson/Rebecca Clube 0207 398 7700
globalenergy@abchurch-group.com
Reverse Takeover, General Meeting and Admission
Each of the Transactions constitutes a reverse takeover pursuant
to Rule 14 of the AIM Rules and accordingly they require
Shareholder approval, which is also required for the issue of the
Convertible Loan Notes. Implementation of the Proposals is
conditional, inter alia, upon the passing of the Resolution at a
General Meeting to be held at the registered office of the Company
at 3 More London Riverside, London, SE1 2AQ at 9.00 a.m. on
Wednesday, 8 February 2017. Although the Transactions are subject
to approval by way of a single Resolution, they are subject to some
different conditions and they are not inter-conditional. It is
possible that they could complete at different times or that one
completes and the other does not. It is however currently
anticipated that prior to the General Meeting, the only conditions
for completion of both Transactions will be passing of the
Resolution and Admission. It is therefore anticipated that the
Transactions will both complete on 9 February 2017.
Admission Document
The following text has been extracted from the Admission
Document which has been published today. Capitalised terms shall
have the same meaning as in the Admission Document unless the
context requires otherwise.
ADMISSION STATISTICS
Issued Share Capital 36,112,187
Number of Ordinary Shares on Admission 36,112,187
ISIN on Admission GB0031461949
SEDOL on Admission 3146194
Existing TIDM GED
TIDM on Admission NAUT
Maximum number of new Ordinary Shares which
could be issued on full conversion of the Convertible
Loan Notes* 32,970,628
* The maximum number of new Ordinary Shares which could be
issued on full conversion of the Convertible Loan Notes has
for this purpose been calculated assuming conversion at the
Applicable Conversion Prices for each class on the respective
maturity dates with accrued interest in respect of Convertible
B Loan Notes and Convertible C Loan Notes being satisfied
by the issue of Ordinary Shares and with no adjustment to
the conversion terms.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS**
2017
Date of publication of the Admission Document 16 January
Latest time and date for receipt of CREST voting 9.00 a.m. on 6
instructions February
Latest time and date for receipt of Forms of 9.00 a.m. on 6
Proxy February
General Meeting 8 February 2017
Admission and re-commencement of dealings in 8.00 a.m. on 9
the Ordinary Shares February
** Each of these times and dates above is subject to change and
the timing for completion of the transactions is dependent on the
timing for the conditions being satisfied. Any such change will be
notified by an announcement on a Regulatory Information Service.
All references to time in this table are to Greenwich Mean Time
(GMT).
INTRODUCTION
The Company has today announced that it has conditionally agreed
to purchase three offshore subsea service vessels through the
acquisition of vessel-owning companies from Everest ("Transaction
A"). The Company has also announced that it has conditionally
agreed to purchase a barge vessel through the acquisition of
Everest Vessel Holdings from Alan Quasha and to purchase eight
offshore subsea service vessels and subsea equipment through the
acquisition of a vessel-owning company, Maritime Finance, owned by
McLarty Capital Partners and Caleura Limited ("Transaction B").
Following completion of either Transaction A or Transaction B the
Company's principal activity will be the operation of subsea
service vessels and the provision of subsea oil services.
Transaction A
Global has conditionally agreed to acquire three offshore subsea
service vessels through the acquisition of shares of vessel-owning
companies from Everest in exchange for: (i) forgiveness of $8
million of the outstanding principal amount of the Everest Loan
Note; (ii) the amendment of the terms of the Everest Loan Note to
reduce the interest rate from 12 per cent. to 8 per cent. and to
extend the maturity date from 15 January 2017 to 15 September 2018
(the Company has granted forebearance in respect of any payment
default in the interim); and (iii) contingent additional
consideration equal to the lower of $5 million and 75 per cent. of
the net cash inflows attributable to the Transaction A Vessels for
the period of eighteen months following completion of their
acquisition by the Company. Part of the existing collateral under
the Everest Loan Note, comprising Everest's and its affiliates'
shareholdings in HKN, which is a substantial shareholder in the
Company, will remain in place. Further information on the
Transaction A Agreement is set out in paragraph 11 of Part V of the
Admission Document.
At the time the Everest Loan Note was entered into, Global was a
co-lender to Everest alongside HKN whereby Global initially lent $8
million and HKN lent $2 million. As announced on 1 March 2016,
Global loaned an additional $2 million to Everest. As announced on
31 October 2016, Global purchased the $2 million principal amount
held by HKN at that date at its face value resulting in Global
being the sole holder of the Everest Loan Note since that date.
Further information on the Everest Loan Note is set out in
paragraph 12 of Part V of the Admission Document.
Transaction B
Global has conditionally agreed to acquire eight offshore subsea
service vessels (the "Transaction B Vessels"), certain equipment
and a barge vessel (the "Rider Barge") through the transfer of
shares of vessel-owning companies in exchange for Global issuing
Convertible B Loan Notes and Convertible C Loan Notes. In addition,
and as part of Transaction B, MCP, Caleura and Everest have
conditionally undertaken to subscribe in cash at their nominal
amount for, in aggregate, $10.5 million of Convertible A Loan Notes
to be issued by the Company. Further details of Transaction B and
the Convertible Loan Notes are set out below in paragraph 4.
Change of Name
The Directors are proposing that the Company's name be changed
to "Nautilus Marine Services PLC" to reflect the proposed change in
the Company's principal business. This will be implemented by the
passing of the Resolution.
Conditionality and Admission
Each of the Transactions constitutes a reverse takeover pursuant
to Rule 14 of the AIM Rules and accordingly they require
Shareholder approval, which is also required for the issue of the
Convertible Loan Notes. Implementation of the Proposals is
conditional, inter alia, upon the passing of the Resolution at the
General Meeting to be held at the registered office of the Company
at 3 More London Riverside, London SE1 2AQ at 9.00 a.m. on
Wednesday, 8 February 2017. Although the Transactions are subject
to approval by way of a single Resolution, they are subject to some
different conditions and they are not inter-conditional. It is
possible that they could complete at different times or that one
completes and the other does not. It is however currently
anticipated that by the time of the General Meeting, the only
outstanding conditions for completion of both Transactions will be
the passing of the Resolution and Admission. It is therefore
anticipated that the Transactions will both complete on 9 February
2017 and that Admission will become effective and that dealings in
the Ordinary Shares on AIM will recommence at 8.00 a.m. on the same
day.
No new Ordinary Shares are being issued at the time of
completion of either Transaction, but new Ordinary Shares would be
issued on conversion of any of the Convertible Loan Notes and
potentially settlement of accrued interest.
The Admission Document contains detailed information about the
Transaction A Vessels, the Transaction B Vessels and the terms of
Transaction A and Transaction B and explains why the Board consider
the Proposals to be in the best interests of the Company and its
Shareholders as a whole and recommends that you vote in favour of
the Resolution to be proposed at the General Meeting, notice of
which is set out at the end of the Admission Document.
BACKGROUND INFORMATION ON GLOBAL
History and Development of the Group
Global has been listed on AIM since March 2002 and since its
incorporation has been a producer and seller of hydrocarbons. The
Company's portfolio includes exploration and developmental drilling
opportunities in Colombia, South America. The Company currently
holds two contracts: the Bolivar and Bocachico Association
Contracts, both in the Middle Magdalena Valley of Colombia. Global
holds a 100 per cent. working interest in the Bolivar and Bocachico
Association Contracts held in Colombia and both are subject to
royalties payable on production of 20 per cent. Revenue from
continuing operations currently relates solely to oil production
from the Company's Torcaz #2 well located in the Bocachico
Association Contract area.
On 5 December 2014 the Company disposed of its major asset,
Global's contract areas within the Llanos Basin (the "Llanos
Assets") in Colombia, for $50 million through the sale of the
entire issued share capital of the Company's relevant wholly owned
subsidiary. The disposal of the Llanos Assets left Global with only
its operations associated with its Bolivar and Bocachico
Association Contract areas and allowed the Company to eliminate its
outstanding debt. Since the disposal, the Company has remained
debt-free and has actively been pursuing energy-based strategic
opportunities to realise value for its shareholders.
The Group's Current Businesses and Activities
As described above, the Company's portfolio comprises a base of
exploration and developmental drilling opportunities in its Bolivar
and Bocachico Association Contract areas within Colombia, South
America.
The reserve estimates shown below were developed by a
professional engineer licenced in the State of Texas employed by
Ralph E. Davis Associates, Inc. ("RED") (of 711 Louisiana Street,
Suite 3100 Houston, Texas 77002), an independent petroleum
engineering firm, and are based on the PRMS joint reserve and
resource definitions of the Society of Petroleum Engineers, the
World Petroleum Council, the American Association of Petroleum
Geologists and the Society of Petroleum Evaluation Engineers
consistent with UK reporting purposes. Proved and probable reserve
estimates are based on a number of underlying assumptions including
oil prices, future costs, oil in place and reservoir performance,
which are inherently uncertain. RED uses established industry
techniques to generate its estimates. However, the amount of
reserves that will ultimately be recovered from any field cannot be
known with certainty until the end of the field's life.
The table below presents the Company's reserve information for
its Colombian Association Contracts as at 31 December 2015:
Contract Country Basin Held with: Expiry Acreage Initial Proved 2P 3P
Name Date Royalty Reserves Reserves Reserves
(%) (mmbbls) (mmbbls) (mmbbls)
Empresa
Colombiana
(A) Middle de Petroleos
Bolivar Colombia Magdalena ("Ecopetrol") 2024 21,000 20 0 0 0
(B) Middle
Bocachico Colombia Magdalena Ecopetrol 2022 54,700 20 0 0 0
The Company has a strong cash balance, a streamlined overhead
structure and no mandatory contract or debt obligations which are
significant advantages in the current oil price environment. While
preserving Global's acreage in Colombia (but not undertaking any
development work) until oil prices recover further, the Company has
been actively vetting acquisition prospects in both the petroleum
exploration and production sector as well as the oilfield services
sector. Global has not limited itself to looking at traditional
petroleum exploration and production plays and has expanded its
geographical research to cover potential opportunities outside of
the current South America focus. During the first half of 2016,
Global reorganised personnel and work functions to both streamline
its functions as well as strategically position the Company to take
advantage of opportunities which become available to it.
The Directors believe that the sustained low oil pricing has
created enhanced buying opportunities stemming from
highly-leveraged companies that are challenged by this current
downturn. Global continues to have financial strength with a strong
cash position and a debt-free balance sheet and believes that
multiple sectors within the energy industry provide excellent "buy
low", "hold" and "sell high" scenarios.
The Company has identified the Transactions, two opportunities
in the Gulf of Mexico, as an initial entry into the global offshore
subsea sector to take advantage of distressed market conditions
through counter-cyclical investment, consolidation and technology
opportunities with, the Directors believe, the potential to realise
increased value for Shareholders. Accordingly, following completion
of the Transactions, Global's focus will be on the subsea services
industry and the Colombian acreage will be of only marginal
importance. No cash is payable by the Company at Admission pursuant
to the Transactions and the Company will continue to look for
additional investment opportunities in the subsea services
sector.
Summary Financials of Global Energy Development plc
6 months Year ended Year ended Year ended
ended 30 31 December 31 December 31 December
June 2016 2015 2014 2013
$'000 $'000 $'000 $'000
Revenue 84 365 689 33,612
(Loss)/profit before
tax from continuing
operations (2,329) (26,725) (17,275) 3,411
Total assets 32,706 35,459 65,220 123,319
Net assets 29,703 32,253 55,800 80,890
Cash and cash equivalents 21,012 25,608 41,153 3,415
The information in respect of the 6 months ended 30 June 2016
above is extracted from Global's interim accounts ended the same
date and is unaudited.
TRANSACTION A
The Company has identified three offshore subsea service vessels
belonging to Everest which are based in the Gulf of Mexico, namely
Mystic Viking, Midnight Star and Cal Diver 1. Everest has agreed to
sell these vessels ("Transaction A Vessels") free from encumbrances
and liens through the transfer of all of the shares of the
vessel-owning companies which hold no other assets or liabilities
other than the Transaction A Vessels with full indemnification from
Everest. The Transaction A Vessels, are currently in laid up status
and can be placed in service in mid to shallow waters following dry
docking and improvement works. Global will assess current and
future market conditions along with costs of improvement works,
expected return on investment and related timing for dry dock
improvements to these vessels in order to determine the proper time
to put the Transaction A Vessels back into service to operate
profitably.
Transaction A Vessels
Mystic Viking
Built in 1983, the Mystic Viking is an offshore supply vessel,
fitted with a SIMRAD Dynamic
Positioning System ("DP") and is currently set up to support
Remotely Operated Vehicle ("ROV") programmes in the Gulf of Mexico.
The Mystic Viking is equipped with a 50 ton Hydralift crane, a
helideck suitable for a Bell 212 helicopter and has accommodations
of up to 57 berths. The vessel is currently flagged in the Bahamas
and the port of registry is Nassau, Bahamas.
The Mystic Viking is currently held in a newly-created
affiliated entity of Everest, NMS Viking Inc. (incorporated and
registered in the Marshall Islands) and has been delivered by
Everest to a location in Louisiana, USA as designated by
Global.
Midnight Star
Built in 1975 and refurbished in 2011, the Midnight Star is
fitted out as a diving support vessel featuring a six-man
saturation diving system depth rated up to 300 meters (1,000 feet).
The Midnight Star is equipped with a 31 ton EBI crane, has a
four-point mooring system for diving operations and has
accommodations of up to 42 berths. The vessel is currently flagged
in Vanuatu and the port of registry is Port Villa, Vanuatu.
The Midnight Star is currently held in a newly-created
affiliated entity of Everest, NMS Star Inc. (incorporated and
registered in the Marshall Islands) and has been delivered by
Everest to a location in Louisiana, USA as designated by
Global.
Cal Diver 1
Built in 1974 and refurbished in 2013, the Cal Diver 1 is a
four-point diving support vessel and is currently flagged in the
United States and registered in New Orleans, Louisiana, USA. Cal
Diver 1 has been in an extended period of cold lay up and would
require more extensive work and investment than the Mystic Viking
and Midnight Star to return to service.
The Cal Diver 1 is currently held in a newly-created affiliated
entity of Everest, NMS CD1 Inc. (incorporated and registered in the
Marshall Islands) and will be delivered by Everest to a location in
Louisiana, USA as designated by Global.
Valuation and transaction terms
The fair market value of each of the Transaction A Vessels has
been appraised by Kennedy Marr, a global maritime firm
headquartered in the U.K.
The Company, utilising the fair market value appraisals received
from Kennedy Marr, has agreed a consideration of $8 million for the
Transaction A Vessels which will be satisfied by forgiveness of $8
million of the outstanding principal amount of the Everest Loan
Note and modification of its terms (as described below). In
addition, there is a future contingent consideration payment to be
calculated as the lower of $5 million or 75 per cent. of the net
cash inflows (as defined in the Transaction A Agreement) associated
with the Transaction A Vessels for the period of eighteen months
following completion of Transaction A. Any such contingent
consideration will be satisfied with up to $4 million offset
against the remaining Everest Loan Note balance with any remaining
balance of the contingent consideration to be payable in cash or as
the parties may otherwise agree.
Everest Loan Note
As previously announced, Global holds a loan note with Everest
for $12 million which is payable in full on 15 January 2017. The
Company has granted forebearance in respect of any non-payment
default pending completion or termination of the Transaction A
Agreement to allow Transaction A to proceed. If the Transaction A
Agreement terminates without Transaction A completing, the Everest
Loan Note will be immediately repayable. The Everest Loan Note
currently has an interest rate of 12 per cent. and is
collateralised by Everest and its affiliates' shareholdings in HKN,
which is a substantial shareholder in the Company, and security
over the Rider Barge and the Transaction A Vessels.
Upon completion of Transaction A, the Company will amend the
terms of the Everest Loan Note (of which $4 million of principal
will remain outstanding following settlement of the Transaction A
consideration). The new terms of the Everest Loan Note will include
a reduced interest charge of 8 per cent. per annum, payable
quarterly in arrears, an extended maturity date of 15 September
2018 (subject to acceleration) to be implemented by entry into the
Everest Loan Note Amendment Deed with the existing collateral over
the shares in HKN remaining in place and securing the obligations
of Everest to Global.
Global's Future Plans for the Transaction A Vessels
Following completion of Transaction A, Global will hold the
Transaction A Vessels at its Berwick dock facility in Louisiana,
USA with access to the Gulf of Mexico (see below). Global will
assess current and future market conditions along with any costs,
expected return on investment and related timing for dry dock
improvements to these vessels in order to determine the most
appropriate work to be undertaken on each Transaction A Vessel and
the timing to put it back into service to operate profitably.
By the time of completion of each of the Transactions, all of
the Transaction A Vessels or Transaction B Vessels (as applicable)
must have been delivered to the Berwick dock facility.
TRANSACTION B
The Company identified certain offshore subsea service vessels
(the Transaction B Vessels), a barge vessel (the Rider Barge) and
certain equipment located in Louisiana, USA which had been used to
provide offshore services in the Gulf of Mexico.
The Directors believe that Transaction B complements Transaction
A as an initial entry into the Gulf of Mexico offshore subsea
services sector pursuant to the Company's new global strategy to
take advantage of distressed market conditions through
counter-cyclical investment, consolidation and technology
opportunities with the potential to realise increased value for
Shareholders.
The Transaction B Assets (comprising the Transaction B Vessels
and equipment) will be acquired by the acquisition of the
recently-incorporated Maritime Finance from MCP and Caleura after
it has acquired the Transaction B Assets from DCM pursuant to
foreclosure proceedings which have been initiated as described
below.
MCP and Caleura have conditionally agreed:
(i) to subscribe at their nominal amount for Convertible A Loan
Notes with an aggregate nominal amount of up to $10.0 million in
cash; and
(ii) to transfer to Global all of the issued and outstanding
interests in the vessel-owning company (Maritime Finance) (which
will prior to completion of Transaction B own the Transaction B
Assets free from liens and encumbrances) in consideration for the
issue of $4.6 million of Convertible B Loan Notes and $10.4 million
of Convertible C Loan Notes proportionate to their ownership of
Maritime Finance.
The Rider Barge will be acquired by the acquisition of Everest
Vessel Holdings.
Everest has conditionally agreed to subscribe at their nominal
amount for Convertible A Loan Notes with an aggregate nominal
amount of $0.5 million in cash.
Alan Quasha has conditionally agreed to sell all issued and
outstanding interests in Everest Vessel Holdings (which owns the
Rider Barge free from encumbrances and liens) to Global in
consideration for the issue of $1.5 million of Convertible B Loan
Notes and $4.6 million of Convertible C Loan Notes.
Further information on the Transaction Agreements is set out in
paragraph 11 of Part V of the Admission Document.
Acquisition of the Transaction B Assets from DCM - The
Foreclosure Process
Everest is also the holder of 76.5 per cent. of the issued
shares in Deepcor Marine Inc. ("DCM"). MCP and Caleura advanced
secured loans to DCM (the "MCP Loans") on which interest has
accrued. The Transaction B Assets were pledged as part of the
security for the MCP Loans.
MCP and Caleura assigned part of the MCP Loans and all their
rights in respect thereof and the related security to Maritime
Finance in consideration for the issue to them, separately, of
shares comprising in aggregate 100 per cent. of the issued
interests in Maritime Finance. MCP and Caleura have conditionally
agreed to sell all of the interests in Maritime Finance to Global
as part of Transaction B.
Maritime Finance has exercised its rights of foreclosure
pursuant to the security in respect of the MCP Loans over the
Transaction B Assets. The transfer of the Transaction B Vessels to
Maritime Finance is expected to be implemented through a court
order confirming the sale and directing the issue of the relevant
bills of sale. The transfer of the equipment, subject to
Transaction B, is not subject to such judicial proceeding and is
intended to be foreclosed upon in accordance with the provisions of
applicable law. Following completion of the foreclosure process and
transfer of the Transaction B Assets to Maritime Finance it will
have full ownership and possession of the these assets free from
all encumbrances and liens.
Completion of the transfer of the Transaction B Assets to
Maritime Finance is a condition to completion of Transaction B and
is currently expected to take place on or around 27 January 2017,
subject to any potential delays.
Provisions applicable to both Transactions
In certain circumstances, including if claims are made against
any of the vessels which are the subject of the Transactions or
their ship-owning companies relating to pre-completion events and
are not settled by the sellers, Transaction A and/or Transaction B
(as applicable) could be reversed with the Everest Loan Note
obligations being reinstated and/or the related B and C Convertible
Loan Notes being cancelled.
As described in further detail below, some of the Convertible
Loan Notes are due to be issued at the time of completion of the
Transactions, with the balance to be issued within the following
three months.
Everest is an affiliated company of the Quasha family trusts,
which also have an interest in Lyford, an existing shareholder of
the Company. Alan Quasha is a principal beneficiary of the Quasha
family trusts. HKN Inc., the Company's principal shareholder,
Lyford and its parties acting in concert with it are interested in
22,553,406 Ordinary Shares, representing 62.45 per cent. of the
issued share capital of the Company.
Transaction B Vessels
DC Dancer
Built in 1977, the DC Dancer is a four-point diving support
vessel that supports surface diving operations. The DC Dancer is
equipped with a 30 ton EBI crane and has accommodations of up to 36
berths. The vessel is currently flagged in the United States and
the port of registry is in New Orleans, Louisiana.
The DC Dancer will be delivered by MCP to the Berwick dock
facility in Louisiana, USA as designated by Global.
DC Star
Built in 1967, the DC Star is a four-point diving support vessel
that assists surface diving operations. The DC Star is equipped
with a 20 ton HydraPro crane and has accommodations of up to 32
berths. The vessel is currently flagged in the United States and
the port of registry is in New Orleans, Louisiana.
The DC Star will be delivered by MCP to the Berwick dock
facility in Louisiana, USA as designated by Global.
DC Fred
Built in 1969, the DC Fred is a four-point diving support vessel
that assists surface diving operations. The DC Fred is equipped
with a 25 ton Coast crane and has accommodations of up to 36
berths. The vessel is currently flagged in the United States and
the port of registry is in Morgan City, Louisiana.
The DC Fred will be delivered by MCP to the Berwick dock
facility in Louisiana, USA as designated by Global.
DC IV
Built in 2000, the DC IV is a four-point diving support vessel
that assists surface diving operations and offshore inspections.
The DC IV has accommodations of up to 21 berths. The vessel is
currently flagged in the United States and the port of registry is
in Morgan City, Louisiana.
The DC IV has been delivered by MCP to the Berwick dock facility
in Louisiana, USA as designated by Global.
DC Polo
Built in 1983, the DC Polo is a four-point diving support vessel
that assists surface diving operations and offshore inspections.
The DC Polo has accommodations of up to 19 berths. The vessel is
currently flagged in the United States and the port of registry is
in Morgan City, Louisiana.
The DC Polo will be delivered by MCP to the Berwick dock
facility in Louisiana, USA as designated by Global.
DC Triumph, DC Victory, and DC Sterling
The DC Triumph, Victory, and Sterling are currently out of
service and would require extensive work and investment to return
to service. The Company may determine to salvage these vessels.
Rider Barge
Built in 1995, the Rider Barge is a non-propelled pipelay barge.
It features pipe laying equipment and can support air diving
operations. The Rider Barge has accommodations of up to 88 berths.
The vessel is currently flagged in the United States and the port
of registry is in New Orleans, Louisiana and is in laid up
status.
The Rider Barge will be delivered by Everest Vessel Holdings to
the Berwick dock facility in Louisiana, USA as designated by
Global.
Berwick dock facility
Global has signed a one-year lease with Hellenic, L.L.C. for
exclusive use of the docking facility in Berwick, Louisiana. Lease
of this facility provides 24-hour docking services. The Company has
also contracted for on-site 24-hour security for the vessels. The
facility also includes office space and adequate area for storage
of equipment.
The lease is for an initial period of one year at a rate of
$10,000 per month and has an option for a further two years at
$12,000 per month.
Convertible Loan Notes:
Three forms of Convertible Loan Notes are due to be issued by
the Company pursuant to the Transactions. Set out below is a
summary of the principal terms which differ between the different
tranches and those which apply to all.
Convertible A Loan Note:
Principal Amount: $10,500,000
Maturity Date: 1 January 2027 (unless converted to Ordinary
Shares before then). Payments on maturity
are to be settled in cash.
Interest: Non-compounding interest will be payable
upon maturity or conversion (calculated
on a 360-day calendar year) at 8 per
cent.
Conversion Price: The outstanding principal amount will
be convertible into Ordinary Shares at
50 pence per share (the "A Conversion
Price"), subject to adjustment in certain
circumstances.
Convertible B Loan Note:
Principal Amount: $6,100,000
Maturity Date: 1 January 2029 (unless converted to Ordinary
Share before then). Payments on maturity
are to be settled in cash or satisfied
in whole or in part by the issue of Ordinary
Shares at the option of the Company on
the basis described under "Repayment
Terms" below.
Interest: Non-compounding interest will be payable
upon maturity or conversion (calculated
on a 360-day calendar year) at 6 per
cent., payable in cash or satisfied by
the issue of Ordinary Shares at the option
of the Company.
Conversion Price: The outstanding principal amount will
be convertible into Ordinary Shares at
160 pence per share (the "B Conversion
Price"), subject to adjustment in certain
circumstances.
Convertible C Loan Note:
Principal Amount: $15,000,000
Maturity Date: 1 January 2032 (unless converted to Ordinary
Shares before then). Payments on maturity
to be settled in cash or satisfied in
whole or in part by the issue of Ordinary
Shares at the option of the Company on
the basis described under "Repayment
Terms" below.
Interest: Non-compounding interest will be payable
upon maturity or conversion (calculated
on a 360-day calendar year) at 6 per
cent., payable in cash or satisfied by
the issue of Ordinary Shares at the option
of the Company.
Conversion Price: The outstanding principal amount will
be convertible into Ordinary Shares at
225 pence per share (the "C Conversion
Price" and; together with the A Conversion
Price and B Conversion Price, the "Applicable
Conversion Price"), subject to adjustment
in certain circumstances.
General Terms of Convertible Loan Notes:
Voluntary Conversion A holder of Convertible Loan Notes may
Terms: convert any amount of the outstanding
principal amount and (in the case of
the Convertible B Loan Notes and Convertible
C Loan Notes only) any unpaid and accrued
interest of the Convertible Loan Notes
into Ordinary Shares at the Applicable
Conversion Price at any time following
thirty days from the issue of the relevant
Convertible Loan Notes with a 20-day
notice to the Company.
Mandatory Conversion The Company may elect to convert the
Terms: outstanding principal amount of the Convertible
Loan Notes (along with any unpaid and
accrued interest on those Convertible
B and C Loan Notes) into Ordinary Shares,
in the event that for any 10 consecutive
business days, the average closing price
on AIM of the Ordinary Shares equals
or exceeds 110 per cent. of the Applicable
Conversion Price.
Repayment Terms: Each issue of Convertible Loan Notes
may at any time after issue be redeemed
at their nominal amount by the Company
on 10 days' notice, during which period
conversion rights can be exercised by
the holders.
At maturity any Convertible Loan Notes
not previously converted into Ordinary
Shares, will be redeemed in cash in the
case of the Convertible A Loan Notes,
and either (at the option of the Company)
in cash and/or through the issue of Ordinary
Shares in the case of the Convertible
B Loan Notes and Convertible C Loan Notes.
Ordinary Shares to be issued at maturity
will be issued at a price equal to the
greater of (i) the Applicable Conversion
Price for that class of Convertible Loan
Notes and (ii) 110 per cent. of the average
closing price of the Ordinary Shares
on AIM for the 10 trading days immediately
preceding maturity. If the value of the
Ordinary Shares to be issued on repayment
of Convertible B Loan Notes and Convertible
C Loan Notes on this basis is less than
the value of the principal amount being
repaid, the applicable conversion price
would be reduced to such level as would
result in these values being the same
provided that the applicable conversion
price cannot be less than the nominal
value of the Ordinary Shares.
Pledge Provision: The Convertible Loan Notes will be unsecured.
Global will undertake not to use the
Transaction B Assets (excluding the Rider
Barge) as security or collateral in any
subsequent transaction or financing.
Conversion Price Adjustments: The Applicable Conversion Price will
be subject to standard mechanical adjustments.
Further information on the Convertible Loan Notes can be found
in paragraph 11 of Part V of the Admission Document.
Timing for issue of the Convertible Loan Notes:
The timings for cash subscriptions for the Convertible A Loan
Notes and for the issue of the Convertible B Loan Notes and the
Convertible C Loan Notes as consideration pursuant to the
Transaction B Agreement are set out below:
Date/Time Everest Everest Vessel MCP Caleura Total
Holdings
As part of ALN: Nil ALN: Nil ALN: $2,292,000 ALN: $708,000 ALN: $3,000,000
Completion BLN: Nil BLN: Nil BLN: $1,054,320 BLN: $325,680 BLN: $1,380,000
CLN: Nil CLN: Nil CLN: $2,383,680 CLN: $736,320 CLN: $3,120,000
31 March 2017 ALN: Nil ALN: Nil ALN: $5,348,000 ALN: $1,652,000 ALN: $7,000,000
BLN: Nil BLN: Nil BLN: $2,460,080 BLN: $759,920 BLN: $3,220,000
CLN: Nil CLN: Nil CLN: $5,561,920 CLN: $1,718,080 CLN: $7,280,000
15 April 2017 ALN: $500,000 ALN: Nil ALN: Nil ALN: Nil ALN: $500,000
BLN: Nil BLN: 1,500,000 BLN: Nil BLN: Nil BLN: $1,500,000
CLN: Nil CLN: 4,600,000 CLN: Nil CLN: Nil CLN: $4,600,000
Total ALN: $500,000 ALN: Nil ALN: $7,640,000 ALN: $2,360,000 ALN: $10,500,000
BLN: Nil BLN: $1,500,000 BLN: $3,514,400 BLN: $1,085,600 BLN: $6,100,000
CLN: Nil CLN: $4,600,000 CLN: $7,945,600 CLN: $2,454,400 CLN: $15,000,000
Conversion of the Convertible Loan Notes:
The maximum number of new Ordinary Shares which could be issued
on full conversion of the Convertible Loan Notes, calculated
assuming conversion at the Applicable Conversion Price for each
class on the respective maturity dates with (in the case of the
Convertible B Loan Notes and Convertible C Loan Notes) accrued
interest satisfied by the issue of Ordinary Shares and with no
adjustment to the conversion terms, is as follows:
Number of new Ordinary Shares
Convertible A Loan Notes 17,213,115
Convertible A Loan Notes 5,375,000
Convertible A Loan Notes 10,382,514
Total 32,970,628
SUBSEA SERVICES MARKET OPPORTUNITY AND COMPETITIVE
ENVIRONMENT
Subsea Services
According to a market analysis report, it is estimated that the
Gulf of Mexico has over 3.34 billion barrels of proven oil reserves
in nonproducing reservoirs and that there is approximately $36.4
billion of projected capital expenditure to be spent by the end of
2020 in the Gulf of Mexico as a whole of which $8.4 billion (23 per
cent.) is in depths of less than 1,600 metres (Estimated Oil and
Gas Reserves, Bureau of Ocean Energy Management, March 2016).
Currently, in the Gulf of Mexico, there are over 3,800
production platforms and 33,000 miles of offshore pipelines
(Source: Impact of the 2008 Hurricanes on the Natural Gas Industry,
Energy Information Administration).
Subsea service vessels, similar to those being purchased
pursuant to the Transactions, are used to transport divers,
technology and equipment to oil fields which require work-overs or
remediation. Most servicing is undertaken subsea which requires
specialist divers, remote operated vehicles, operators and
equipment, all of which are vessel-based. Recent Gulf of Mexico
shallow water field transactions, such as the divestiture by
Chevron of their shallow water fields, may provide vessel operators
with potential new vessel contract tenders and service
opportunities over the next few years.
According to the report referenced above, the drop in demand for
diver support vessels through 2014-2016 suggests a substantial
backlog in inspection, repair and maintenance. The report notes
that while maintenance intervals are not publicly declared and vary
from operator to operator, it is to be expected that demand will
pick up post-2017 as work programmes have not historically been,
and are unlikely to be, deferred for more than four years.
Examples of services provided by subsea service companies
are:
-- Platform and pipeline inspections - a routine visual
inspection of the physical infrastructure by divers or Remote
Operated Vehicles (ROVs);
-- Trenching, dredging and burial - the excavation of the subsea
surface for the purpose of either burying pipes and cables or
deepening the waterway;
-- Accommodation support - the provision of temporary lodgings for offshore rig workers;
-- Search and recovery;
-- Logistics support;
-- Wet (underwater) welding of pipes;
-- Hot tapping - connection of existing piping with the
interruption of emptying that section of pipe;
-- Underwater burning - the cutting of subsea pipelines;
-- Installation of risers - pipes that connect an offshore rig to a subsea system;
-- Change out of single-point mooring systems - loading buoys
anchored offshore that provide a mooring point;
-- Installation of pipeline end manifolds - the mechanics that
connect a subsea pipeline to the end rig;
-- Inspection and repair of remote operated vehicles;
-- Decommissioning support; and
-- General diving operations requiring vessel support.
Competitive Environment and Regulation
Several local vessel operators within the Gulf of Mexico are
geared towards DSV and ROVSV services. Of these local operators,
several have been forced to allow their floating assets to
deteriorate over a prolonged period due to the financial pressures
in the area.
The larger competitors within the shallow water Gulf of Mexico
include Triton Diving, Aqueous, Bisso Marine, Epic Divers, Chet
Morrison and Ranger Subsea. Currently there is considerable
competition in the market given the small number of projects open
for tendering.
The competitive environment and fragmented nature of this
sub-sector may lead to consolidation in the event of further
sustained recovery in the oil price. The Directors anticipate that,
in addition to increased activity from any stronger oil price,
increased operational vessel utilisation will be achievable as
increased subsea inspection and repair operations become critical
for field operation productivity and/or compliance with regulatory
requirements.
The Jones Act, also known as the Merchant Marine Act of 1920, is
US legislation that reserves US coastwise transportation to
particular US flag ships that have a "coastwise endorsement" on
their US Certificate of Documentation. As less than 75 per cent. of
Global's issued shares are owned by US persons the Enlarged Group's
vessels, even those which are US flagged, owned by US entities and
managed by US personnel, will not be eligible to have a "coastwise
endorsement" on their US Certificate of Documentation. This means
that they will be likely not to be eligible to undertake
transportation of merchandise and passengers between US ports and
places. This may reduce the opportunities for profitable
exploitation of the Enlarged Group's vessels.
REASONS FOR THE TRANSACTION
Although the timing and sustainability of further recovery in
the oil price is unknown, the Company believes that further price
recovery is, at some level, inevitable. The Directors believe that
during the next 18 months there will be an opportune period for the
Company to acquire assets or businesses within the energy industry
at low prices in order to expand and create a more diversified
portfolio of assets and/or companies that can take advantage of
such further recovery in the oil price and any increase in subsea
service activity.
For the reasons described above and below, the Company believes
that the Transactions are in the best interest of its
Shareholders.
Penetration into the asset-backed vessel service industry
The Transactions represent Global's first step into the global
subsea services industry. The Company believes that the anticipated
oil price recovery will bring significant opportunities in the
subsea service industry and acquiring the Transaction A Vessels and
Transaction B Assets and will provide it with a platform to
capitalise on this market.
Technology services
The Company will be seeking to invest in offshore technology
that aims to increase service levels, improve profitability and add
value to its subsea service assets.
Logistics
The Company will also be looking to invest in subsea services
logistical businesses or to develop its own expertise in this area.
The Directors believe that this expertise, alongside technology and
subsea assets, can create a competitive advantage when the oil and
subsea industry recovers.
RELATED PARTY TRANSACTIONS
Everest and Everest Vessel Holdings are affiliated companies of
the Quasha family trusts which also have an interest in Lyford, an
existing shareholder in Global. Alan Quasha, the proposed seller of
Everest Vessel Holdings is a principal beneficiary of the Quasha
family trusts. Alan Quasha is a director of HKN, the Company's
principal shareholder. In addition, Alan Quasha's brother, Wayne
Quasha, controls Everest which itself controls Lyford. HKN, Lyford
and the parties acting in concert with it are interested in
22,553,406 Ordinary Shares, representing 62.45 per cent. of the
issued share capital of the Company. By virtue of these holdings,
the entry into the Transaction Agreements with Everest and Alan
Quasha and the amendments to the Everest Loan Note and issuance to
Everest and Alan Quasha of Convertible Loan Notes constitute
related party transactions in accordance with
AIM Rule 13.
The Independent Directors consider, having consulted with
finnCap, that the terms of Transaction Agreements, amendments to
the Everest Loan Note and issuance to Everest and Alan Quasha of
Convertible Loan Notes are fair and reasonable insofar as
Shareholders are concerned.
CURRENT TRADING AND FUTURE PROSPECTS
For the six months to 30 June 2016, Global reported the
following financial highlights:
-- Strong cash and cash equivalents balance of $21 million;
-- Note receivable balance of $10 million with a 12 per cent.
coupon (balance now standing at $12 million);
-- Debt free;
-- Revenue of $84,000 and loss before tax from continuing operations of $2.3 million.
These figures are taken from the Group's unaudited interim
accounts for the period ending 30 June 2016.
Current trading is consistent with the Board's expectations.
The Company is incurring non-recurring costs associated with the
Transactions and the Admission process.
As stated above, the Directors believe that the entry into the
subsea services sector represents a good counter-cyclical
investment for the Company that will enable it to capitalise on
recoveries in the oil price and the related requirement for support
services.
On completion of the Transactions, the Company will own 11
subsea service vessels, certain equipment and one barge. The
Directors believe that these will allow the Group to service the
offshore oil and gas platforms that operate in the Gulf of Mexico
in depths of less than 300 feet (although the Mystic Viking and
Midnight Star are also able to operate in depths of up to 5,000
feet and 700 feet respectively). This sub-sector is currently
depressed since the prevailing oil price makes many operations for
current oil and gas operators uneconomic. The Directors believe
that this has had a knock-on effect on the companies that service
this part of the industry as they have been forced to compete for
work which has become scarcer. The Directors are firm in their view
that the Company will not take on uneconomic work in order to have
its vessels in service. Accordingly, it is likely that the vessels
will remain inactive for a considerable period until the oil price
recovers and exploration and production operations return in the
shallow water areas of the Gulf of Mexico. The Company will
continue to incur maintenance and docking costs which may not be
covered by its earnings while the vessels remain inactive. The
Company's strong cash balance will enable it to adopt such an
approach for the foreseeable future. Upon a recovery in the market,
Global will determine in what order it will put its vessels into
service (if at all).
However, the Directors believe that an improvement in the oil
price is, at some level, inevitable and that, accordingly, oil and
gas exploration and production activities will increase in the
shallow water areas of the Gulf of Mexico. The Directors believe
that the Company will be able to take advantage of such recovery
through the exploitation of its vessels and its other assets in an
environment in which many competitors will have suffered from the
attrition of the prior years.
DIVID POLICY
The Company has not to date paid any dividends and has no
current plans to do so. Under the terms of the Convertible B Loan
Notes and the Convertible C Loan Notes while any of such notes
remaining outstanding the Company shall not declare or pay any cash
or share dividends to be paid to its shareholders for three years
following the issuance date of those Notes.
CHANGE OF COMPANY NAME
If passed, the Resolution will change the name of the Company to
Nautilus Marine Services PLC, to reflect the proposed change in the
Company's principal business. The change of name will take effect
upon the issue by Companies House of a certificate of incorporation
in the new name.
Upon the change of name being registered at Companies House, the
Company's AIM TIDM will be changed to NAUT. The Company's website
address will be changed to www.nautilusmarineplc.com with effect
from Admission.
TAKEOVER CODE
At Admission, the Takeover Code will continue to apply to the
Company. Under Rule 9 of the Takeover Code, where any person who,
together with persons acting in concert with him or her, is
interested in shares which in aggregate carry not less than 30 per
cent. but does not hold shares carrying more than 50 per cent., of
the voting rights of a company that is subject to the Takeover Code
and such person, or any persons acting in concert with him or her,
acquires an interest in any other shares in the company which
increases the percentage of shares carrying voting rights in which
he or she is interested, such person would normally have to extend
a general offer to all holders of any class of equity share capital
or other class of transferable securities carrying voting rights of
that company for cash at not less than the highest price paid by
him or her, or parties acting in concert with him or her, during
the 12 months prior to the announcement of the offer. Once a
person, together with persons acting in concert with him or her, is
interested in shares which in aggregate carry more than 50 per
cent. of the voting rights of a company that is subject to the
Takeover Code, any further acquisition of shares would not normally
require such a general offer, subject to the provisions of Note 4
of Rule 9.1.
Under the Takeover Code, a concert party arises where persons
acting together pursuant to an agreement or understanding (whether
formal or informal and whether or not in writing) actively
cooperate, through the acquisition by them of an interest in shares
in a company, to obtain or consolidate control of the company or to
frustrate an offer for a company. Control means holding, or
aggregate holdings, of an interest in shares carrying 30 per cent.
or more of the voting rights of the company, irrespective of
whether the holding or holdings give de facto control.
At Admission, the aggregate holding of the Concert Party will be
in excess of 50 per cent. of the Company's voting rights. Each
member of the Concert Party, with the exception of HKN, is
therefore entitled to acquire further Ordinary Shares without being
required to make a mandatory offer, provided that each of their
individual interests in Ordinary Shares does not increase through a
Rule 9 threshold.
HKN's holding represents 35.5 per cent. of the Company's voting
rights and therefore, were HKN to acquire further Ordinary Shares
which increases the percentage of shares carrying voting rights in
which they are interested, they would be required to make a
mandatory offer under Rule 9 of the Takeover Code.
Exercise by MCP of the conversion rights pursuant to all the
Convertible Loan Notes proposed to be issued to them could result
in them being issued Ordinary Shares representing in excess of 30
per cent. of the Company's issued share capital as enlarged by such
issuance. Shareholders should note that if MCP acquires an interest
in Ordinary Shares which increases its percentage of shares
carrying voting rights through 30 per cent., MCP will incur an
obligation under Rule 9 of the Takeover Code to make a general
offer (unless a dispensation from this requirement has been
obtained from the Panel in advance).
Further information on the provisions of the Takeover Code can
be found in paragraph 19 of Part V of the Admission Document.
GENERAL MEETING AND VOTING INTENTIONS
Set out at the end of the Admission Document is a notice
convening a General Meeting to be held on Wednesday 8 February 2017
at 9:00 a.m. (GMT) at the Company's registered office at 3 More
London Riverside, London SE1 2AQ at which the Resolution will be
proposed as a special resolution which to be passed will require a
majority of 75 per cent. of the votes cast to be in favour of the
Resolution.
If passed, the Resolution will (in summary):
a) approve, including for the purposes of the AIM Rules,
implementation of either or both of Transaction A and Transaction B
and authorise the Directors to take all such steps as may be
necessary, expedient or appropriate to carry out the Transactions
with such non-material modifications as they may approve;
b) authorise the Directors, in accordance with section 551 of
the Companies Act, to exercise all the powers of the Company to
allot shares in the Company and to grant rights to subscribe for,
or to convert any security into, shares in the Company up to an
aggregate nominal amount of GBP484,888.69 including in connection
with the creation and issue of the Convertible Loan Notes and the
grant of options pursuant to the Share Option Scheme;
c) to disapply, in accordance with Section 570 and/or Section
571 of the Act (as applicable), the statutory pre-emption rights
which apply on the issue of shares for cash to enable the Company
to issue the Convertible Loan Notes, to grant options pursuant to
the Share Option Scheme in respect of Ordinary Shares with an
aggregate nominal value of GBP36,112.19 representing 10 per cent.
of the Company's current issued Share Capital and in addition to
effect a non-pre-emptive issue of Ordinary Shares for cash up to an
aggregate nominal amount of GBP36,112.19 representing 10 per cent.
of the Company's current issued share capital; and
d) change the name of the Company to Nautilus Marine Services PLC.
The authorities to be granted as summarised in paragraphs (b)
and (c) above shall expire on the conclusion of the next Annual
General Meeting of the Company, but under these authorities the
Company may, before such expiry, make an offer or agreement which
would or might require shares to be allotted or rights to subscribe
for, or to convert any security into, shares to be granted after
such expiry and the Directors may allot shares or grant rights to
subscribe for, or to convert any security into, shares (as the case
may be) in pursuance of such an offer or agreement as if the
authority conferred hereby had not expired.
The authority to be granted as summarised in paragraph (b) above
shall be used in respect of the creation and issue of the
Convertible Loan Notes as to GBP329,706.28, up to GBP36,112.19 in
respect of the grant of options and up to the same amount in
respect of non-pre-emptive issues of shares for cash.
HKN and Lyford, who hold 12,804,768 Ordinary Shares representing
35.5 per cent. of the Issued Share Capital and 9,202,026 Ordinary
Shares representing 25.5 per cent. of the Issued Share Capital,
respectively, have each indicated that they intend to vote in
favour of the Resolution.
ADMISSION
As each of the Transactions constitutes a reverse takeover of
the Company under Rule 14 of the AIM Rules, Shareholder consent to
the Transactions is required at the General Meeting. Provided that
all conditions for the completion of either Transaction A or
Transaction B are satisfied, save only for passing of the relevant
Resolution, if the Resolution is duly passed at the General
Meeting, the admission of the Company's Ordinary Shares to trading
on AIM will be cancelled (immediately prior to Admission) and the
Issued Share Capital will be re-admitted to trading on AIM.
For the avoidance of doubt, Transaction A and Transaction B are
not inter-conditional and
Admission will be effective in the event that only one is
completed.
Application has been made to the London Stock Exchange for the
Issued Share Capital to be admitted to trading on AIM. Admission is
expected to take place at 8.00 a.m. on 9 February 2017.
The Ordinary Shares are eligible for CREST settlement. CREST is
a paperless settlement procedure enabling securities to be
evidenced otherwise than by a certificate and transferred otherwise
than by a written instrument in accordance with the requirements of
CREST. The New Articles permit the holding and transfer of Ordinary
Shares to be evidenced in uncertificated form in accordance with
the requirement of CREST. Accordingly, following Admission,
settlement of transactions in Ordinary Shares may take place within
the CREST system if the relevant Shareholder so wishes. CREST is a
voluntary system and Shareholders who wish to receive and retain
share certificates will be able to do so.
RECOMMATION
The Directors consider that the Proposals are in the best
interests of the Company and Shareholders as a whole. Accordingly,
the Directors recommend that Shareholders vote in favour of the
Resolution at the General Meeting as they intend to do so in
respect of their own beneficial holdings amounting, in aggregate,
to 524,399 Ordinary Shares, representing 1.45 per cent. of the
Issued Share Capital.
Important notice
This announcement and the information contained herein is not
for release, publication or distribution, directly or indirectly,
in whole or in part, in or into or from the United States, Canada,
the Republic of South Africa, Australia, Japan or any other
jurisdiction where to do so might constitute a violation of the
relevant laws or regulations of such jurisdiction.
Certain statements in this announcement are forward-looking
statements which are based on the Company's expectations,
intentions and projections regarding its future performance,
anticipated events or trends and other matters that are not
historical facts. These forward-looking statements, which may use
words such as "aim", "anticipate", "believe", "intend", "estimate",
"expect" and words of similar meaning, include all matters that are
not historical facts. These forward-looking statements involve
risks, assumptions and uncertainties that could cause the actual
results of operations, financial condition, liquidity and dividend
policy and the development of the industries in which the Company's
businesses operate to differ materially from the impression created
by the forward-looking statements. These statements are not
guarantees of future performance and are subject to known and
unknown risks, uncertainties and other factors that could cause
actual results to differ materially from those expressed or implied
by such forward-looking statements. Given those risks and
uncertainties, prospective investors are cautioned not to place
undue reliance on forward-looking
statements. Forward-looking statements speak only as of the date
of such statements and, except as required by the FCA, the London
Stock Exchange or applicable law, the Company undertakes no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Any indication in this announcement of the price at which the
ordinary shares of the Company have been bought or sold in the past
cannot be relied upon as a guide to future performance. Persons
needing advice should consult an independent financial adviser. No
statement in this announcement is intended to be a profit forecast
and no statement in this announcement should be interpreted to mean
that earnings per share of the Company for the current or future
financial years would necessarily match or exceed the historical
published earnings per share of the Company.
finnCap, which is authorised and regulated in the United Kingdom
by the FCA, is acting for Global and for no one else in connection
with the Proposals and will not be responsible to anyone other than
Global for providing the protections afforded to clients of finnCap
or for affording advice in relation to the Proposals, or any other
matters referred to herein.
Neither the content of the Company's website (or any other
website) nor the content of any website accessible from hyperlinks
on the Company's website (or any other website) is incorporated
into, or forms part of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQGGURWGUPMGBA
(END) Dow Jones Newswires
January 16, 2017 02:00 ET (07:00 GMT)
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