Offshore rig services company GulfMark fills for Chapter 11 bankruptcy protection

GulfMark offshoreThe US offshore rig services company GulfMark fills for Chapter 11 bankruptcy protection after reaching an agreement with bondholders to convert debt to equity. The company announced that expects to submit the application for Chapter 11 bankruptcy by May 21, intending to restructure its debt. The bondholders of approximately 47% of GulfMark’s unsecured 6.375% senior notes, which are due 2022, have signed the restructuring support agreement. The agreement calls for the outstanding senior notes to be converted into 35.65% of the equity in a reorganized GulfMark, which should eliminate about 430 million USD of debt and about 27 million USD in annual interest payments.

Additionally, GulfMark will launch a 125 million USD rights offering to holders of its senior notes for another 60% of the equity in the reorganized entity. Existing shareholders will receive 0.75% of the reorganized company’s equity and 7-year warrants for another 7.5%.

“The restructuring will enhance our competitive position when contracting with customers and vendors, and it will substantially strengthen our capital structure and liquidity”, said the President and CEO of Houston-based GulfMark, Quintin Kneen. “While the industry conditions remain challenging, this debt reduction and rights offering will significantly enhance GulfMark’s financial position. We are confident that this step will position GulfMark to seize opportunities as the downturn continues and in the eventual market recovery”, added he.

GulfMark is Houston-based offshore rig services company, which owns, operated and manages a modern fleet of offshore support vessels, including PSV, AHTS, FSV and specialty vessels.