Abu Dhabi’s Gulf Marine Services seeks to raise $100 million from London IPO

Company plans to use the proceeds to buy the vessel Keloa for $37.5m and repay about $20m of shareholder loans.

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Abu Dhabi’s Gulf Marine Services (GMS) plans to raise more than US$100 million via a share float on the London Stock Exchange.

The company, majority owned by regional private equity firm Gulf Capital, expects to generate $100m from the issue of new shares, it said yesterday.

In addition, four of the company’s shareholders – including two Gulf Capital investment vehicles – are each expected to sell an undisclosed proportion of their shareholdings as part of the offer.

The float, which is expected to be completed before the end of next month, will value the company in excess of $1 billion, according to a source close to the process.

Investor presentations are expected to start by the end of this month, the source said. The share float is understood to be primarily targeted at United Kingdom and European investors.

GMS plans to use the proceeds of the float to buy the vessel Keloa for $37.5m and repay about $20m of shareholder loans.

The company operates a fleet of self-propelled self elevated support vessels (SESVs), which are used for offshore oil and gas platform refurbishment and maintenance, well intervention work and offshore wind turbine maintenance.

“Our vessels are in high demand by our clients and we believe demand for our vessels, and for the SESV market as a whole, will continue to increase significantly over the rest of the decade,” said the GMS chief executive Duncan Anderson.

“This gives us confidence to proceed with the planned expansion of our fleet which the net proceeds of the IPO [initial public offering] will help to accelerate.”

GMS’s revenues rose to $184.3m in 2013, up from $106.9m in 2011. The company reported adjusted Ebitda (earnings before interest, taxes, depreciation and amortisation) growth of 32.4 per cent from 2011 to 2013.

The company’s planned float comes amid tough times for the oil and gas service sector, which saw a series of profit warnings in the second half of 2013, which might dampen appetite for GMS shares, according to a London-based oil and gas analyst.

“They’d have to produce a very compelling argument, as it’s perceived as not the easiest environment to operate in,” he said.

“More than just the solid fundamentals, investors will ask whether the company plans to redistrubute earnings to shareholders, or whether the cash raised will be sucked up in a bid for expansion.”

Bank of America Merrill Lynch and Barclays Bank have been named as joint global coordinators, joint bookrunners and joint sponsors of the share offer.

JP Morgan Cazenove is joint bookrunner and Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank are co-lead managers.

Rothschild is acting as financial adviser to GMS.

Gulf Capital acquired its stakeholding in GMS in 2007; the firm had looked to offload a 79-per cent stake in the company in 2012, but talks with two would be suitors collapsed in June in that year due to financing issues and differences over valuation.

As many as six UAE companies are planning to go public during 2014, raising as much from Dh8bn in share sales, according to comments from Majd Maaiteh, the head of securities at National Bank of Abu Dhabi earlier this week.