GulfMark’s revised tender offer is also rejected by ad hoc committee

By Wendy Van Sickle

Columbus, Ohio, Dec. 22 – An ad hoc committee of holders of GulfMark Offshore, Inc.’s 6 3/8% senior notes due 2022 has rejected the company’s revised tender offer, according to a news release.

The committee also opposed the initial tender offer, which was launched on Nov. 23. The company announced on Dec. 15 that it had revised the offer.

The noteholder committee said it holds a blocking position with respect to the revised offer, that it would not be tendering under the revised offer and is “strongly” encouraging other holders not to participate in the revised tender.

The group is made up of financial institutions and hedge funds and holds about 50% of the outstanding notes, which it previously said is the majority of the notes when excluding notes held by insiders.

The committee said it has submitted its own proposal to the company that it says would maximize value for all of the company’s creditors and stakeholders.

“The proposal would meaningfully deleverage the company while giving creditors an option to either retain a significant majority of the equity or accept cash for a portion of their claim,” the committee said in its news release on Thursday.

“If creditors are not being paid in full in accordance with their contractual rights, they and other stakeholders are entitled to retain the upside of the business and should not be forced to cash out at a significant discount at the risk of being relegated to an inferior position in the capital structure as a result of the revised tender offer.”

As previously reported, under the revised tender offer, GulfMark increased the total consideration and extended the expiration date of its tender offer for up to $300 million of its $429.64 million outstanding 6 3/8% senior notes due 2022.

The tender offer is now set to expire at 5 p.m. ET on Dec. 29, extended from Dec. 21.

The total consideration payable under the offer is now $520 per $1,000 principal amount, increased from $500 per $1,000 principal amount.

Holders who tender their notes, whether before or after 5 p.m. ET on Dec. 7, the early tender date, will be eligible to receive the total consideration.

Previously, only holders who tendered their notes by the early tender date were eligible to receive the total consideration, which included an early tender premium of $20 for each $1,000 principal amount. Holders tendering after the early deadline would only have been eligible to receive $480 per $1,000 principal amount.

The company will also pay accrued interest from and including Sept. 15, the last interest payment date for the notes, up to but excluding the settlement date. The settlement date is now expected to be Dec. 30 instead of Dec. 22.

As previously announced, the company received tenders for $136,152,000 of the 6 3/8% notes as of the early tender date.

Tenders may no longer be withdrawn.

The tender offer is subject to a financing condition.

The tender offer will be funded by a new money investment from MFP Partners, LP and Franklin Mutual Advisers, LLC. The investment will be conditioned on closing of the tender offer and will take the form of a new $100 million secured term loan facility, a $100 million revolver to refinance the existing revolver and at least $50 million of new equity, according to a previous press release.

Last week, the company announced that the proposed lenders have agreed to amend the terms of its previously announced new revolving credit facility. The size of the new revolver will be increased to $115 million from $100 million, and a third six-month extension option will be added, allowing for the maturity to be extended to June 2019. The new revolver will be entered into once the tender offer is completed.

As previously reported, in connection with the tender offer and new equity investment from MFP Partners and funds advised by Franklin Mutual, GulfMark and Raging Capital Management, LLC entered into a tender support agreement and a voting agreement. Under the tender support agreement, Raging Capital has committed to tender $85 million of notes in the tender offer. Under the voting agreement, Raging Capital has agreed to vote its capital stock in GulfMark in favor of the issuance of shares of class A common stock upon the conversion of series A preferred stock.

After it closes the tender offer, GulfMark will launch a stockholder rights offering to allow all of its stockholders to participate in a restructured GulfMark at the same equity price given to the investors. Under the tender support agreement, Raging Capital has agreed to invest its pro rata share in the stockholder rights offering.

Miller Buckfire & Co., LLC, a subsidiary of Stifel Financial, is dealer manager for the tender offer. Questions may be directed to Kevin Haggard (212 895-1883) or Chris Weyers (212 847-6480). The information agent and tender agent is D.F. King & Co., Inc. (800 755-7250, 212 269-5550 for banks and brokers or GLF@dfking.com).

Houston-based GulfMark Offshore provides marine transportation services to the energy industry. The company launched the cash tender offer on Nov. 23.

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