EMGS hammers out refinancing plan

In need of additional financing, the Norwegian geophysical services company, EMGS, has started working on a refinancing proposal which should provide it with some stability. 

Following a thorough assessment of all options, an independent board of director of the company which did not include board members representing the major shareholders has, in cooperation with the company’s three largest shareholders, developed a comprehensive refinancing proposal, EMGS said on Friday.

According to the company, the refinancing consists of two elements; a rights issue with gross proceeds of up to $12.5 million, whereof $10 million is underwritten; and issuance of a new, fully underwritten convertible bond loan with a total nominal amount of up to $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 March 5, 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 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,” EMGS said.

The proposal is subject to approval from the company’s general meeting, set to be held on March 23.

EMGS in February posted revenues of $11.3 million for 4Q 2017 compared to $12 million in revenues in the year-before period. The company reduced its quarterly loss to $5.9 million from $15.1 million in 2016.

Losses for the full year 2017 were $21.5 million, up from a loss of $52.1 million in 2016.

The company expects market fundamentals to remain weak going into 2018.

Offshore Energy Today Staff