GulfMark files bankruptcy to implement notes restructuring agreement

By Caroline Salls

Pittsburgh, May 17 – GulfMark Offshore, Inc. filed Chapter 11 bankruptcy on May 17 in the U.S. Bankruptcy Court for the District of Delaware to implement an agreement with noteholders on a comprehensive financial restructuring.

As previously reported, GulfMark said holders of about 47% of the company’s 6 3/8% senior unsecured notes due 2022 signed a restructuring support agreement under which the company will convert its outstanding senior notes to 35.65% of the equity in a reorganized GulfMark.

The conversion will result in the elimination of roughly $430 million in outstanding debt and $27 million in annual interest payments.

The company said it will also launch a $125 million rights offering to holders of its senior notes for an additional 60% of the equity in a reorganized GulfMark, providing liquidity to fund its operations. The rights offering will be backstopped by some of the senior noteholders.

Existing shareholders will receive ¾% of the equity as well as warrants for an additional 7½% of the equity in the reorganized GulfMark. The warrants will have a seven-year term and an exercise price based on a reorganized overall equity value of $1 billion.

GulfMark said it will continue its operations throughout the restructuring process, and the company entered into a commitment letter, subject to execution of definitive documentation, for financing to support its operations during the process.

DNB Bank ASA committed to provide a $35 million senior secured term loan facility in the form of an amendment to GulfMark Rederi AS’ existing NOK 600 million secured revolving credit facility.

The new DNB facility will be available to Rederi in multiple draws and will mature three months after closing, subject to extension for an additional three months.

Proceeds from the facility will be used by Rederi for working capital and general corporate purposes upon GulfMark’s Chapter 11 filing, and the new facility will be available to GulfMark through an intercompany loan to pay Chapter 11 fees, costs and expenses and for working capital and general corporate purposes.

The facility will mature on the earliest of Aug. 18, 45 days after the bankruptcy filing date if the final order is not entered by then, the effective date of a Chapter 11 plan, the completion of a sale of substantially all of the company’s assets, dismissal or conversion of the Chapter 11 case and acceleration of the loans.

Interest will accrue at Libor plus 800 basis points.

According to court documents, GulfMark had $1,076,571,000 in total assets and $737.13 million in total debt as of March 31.

Indenture trustee U.S. Bank NA is the company’s largest unsecured creditor, with a $429.64 million claim related to GulfMark’s 6 3/8% senior notes due 2022.

GulfMark retained Weil, Gotshal & Manges LLP as legal counsel and Alvarez & Marsal North America, LLC and Evercore Group LLC as financial advisers.

Houston-based GulfMark Offshore provides marine transportation services to the energy industry. The Chapter 11 case number is 17-11125.

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