Gulf Marine Services (GMS), a provider of self-propelled self-elevating support vessels (SESVs) to the offshore oil, gas and renewable energy sectors, has made some changes to its existing bank facility agreement.
The UAE-based company informed on Monday that the term of its bank facility agreement was extended by two years with final maturity in 2023.
Furthermore, the company’s scheduled loan repayments will be reduced by two-thirds in both 2018 and 2019.
The company added that the financial covenants amendments and certain restrictions on capital expenditure and dividend payments announced in August 2017 remain unchanged.
A cash sweep mechanism, effective when the leverage ratio exceeds 4 times EBITDA, has now been established from 2018, where 75% of surplus free cashflow (after adjustment for permitted payments and maintaining a minimum cash balance level) will be applied towards repayment of bank debt.
Duncan Anderson, Chief Executive Officer of GMS, said: “We are pleased to announce this two-year extension to our bank facility and the significant reduction in our capital repayments over the next two years. We appreciate the strong support our banking partners have shown for our business model.”
Anderson added: “This new agreement will provide the group with the improved liquidity and the financial flexibility to allow us to benefit from the market recovery.”
Earlier this month, Gulf Marine won a 16-month contract extension for one of its Small Class vessels and a six-month contract extension option for one of its Mid-Size Class vessels, both operating in the Middle East.