EMGS in Refinancing Deal

Maritime Activity Reports, Inc.

March 4, 2018

EMGS crew members at bow of BOA Galatea, sailing from New York. Photo: Electromagnetic Geoservices ASA

EMGS crew members at bow of BOA Galatea, sailing from New York. Photo: Electromagnetic Geoservices ASA

 Cash-strapped Norwegian survey player Electromagnetic Geoservices (EMGS) has launched a refinancing exercise as the geophysical services company seeks to alleviate a liquidity squeeze. 

An independent board of directors of EMGS in cooperation with the company’s three largest shareholders, developed a comprehensive refinancing proposal.
 The Comprehensive Refinancing consists of two elements; (i) a rights issue with gross proceeds of up to USD 12.5 million, whereof USD 10.0 million is underwritten; and (ii) issuance of a new, fully underwritten convertible bond loan with a total nominal amount of up to USD 32.5 million. 
The underwriting will be regulated by way of underwriting agreements, with fully termed underwriting agreements expected to be executed on or about 5 March 2018. 
The rights issue will provide the Company with financing for general corporate purposes.
The net proceeds from the Bond Issue will be used to refinance the Company's existing bond issue. The proposed terms of the Bond Issue include a reduction of the free cash covenant (USD 2.5 million compared with USD 10 million under current bond loan), denomination in USD (new interest rate based on 3M USD LIBOR plus a margin of 5.5 per cent, compared with 3M NIBOR plus a margin of 6.0 per cent under current bond loan), an extension of the maturity (2023 compared with 2019 under current bond loan) and a conversion price equal to 135% of the subscription price in the Rights Issue.
The Independent Board is firmly of the opinion that the Comprehensive Refinancing will secure and maintain shareholder value going forward, by providing the Company with a significantly improved financial runway, stability and flexibility. 
Maritime Reporter Magazine Cover Mar 2019 - Cruise Shipping

Maritime Reporter and Engineering News’ first edition was published in New York City in 1883 and became our flagship publication in 1939. It is the world’s largest audited circulation magazine serving the global maritime industry, delivering more insightful editorial and news to more industry decision makers than any other source.

Maritime Reporter E-News subscription

Maritime Reporter E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

Subscribe for Maritime Reporter E-News