GULFMARK OFFSHORE, INC. (NYSE:GLF) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
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Entry into a Material Definitive Agreement |
Securities Purchase Agreement
On November 23, 2016, GulfMark Offshore, Inc. (the
Company) entered into a Securities
Purchase Agreement (the Purchase
Agreement) with MFP Partners, L.P.
(MFP) and Franklin Mutual Advisers, LLC
(Franklin and collectively with MFP,
the Investors), to issue and sell in a
private placement (the Private
Placement) 50,000 shares of Series A Convertible
Preferred Stock, par value $0.01 per share (Series A
Preferred Stock), for a cash purchase price of
$1,000.00 per share of Series A Preferred Stock
(Series A Preferred Shares), or
$50,000,000.00 in the aggregate. The closing of the Private
Placement (the Closing and the date of
the Closing, the Closing Date) is
expected to occur, subject to the satisfaction of the conditions
set forth in the Purchase Agreement, in December 2016. Proceeds
from the Private Placement will be used to fund a portion of the
Tender Offer (as defined below).
to the Purchase Agreement, in connection with the Closing, the
Company will file with the Secretary of State of the State of
Delaware a Certificate of Designations (the
Certificate of Designations),
substantially in the form attached to the Purchase Agreement as
Exhibit A, to, among other things, authorize and establish the
rights and preferences of the Series A Preferred Shares. The
Series A Preferred Shares are a new class of equity security that
will rank senior to all classes of the Companys common stock
(Common Stock) with respect to
distribution rights, redemption payments and rights upon
liquidation, dissolution and winding up.
The holders of Series A Preferred Shares (the
Holders) are entitled to receive
distributions on the Series A Preferred Shares and any
accumulated but unpaid dividends (the Series A
Preferred Dividends) at an annual rate of 10% (such
annual rate, the Dividend Rate);
provided, that if stockholder approval (Stockholder
Approval) of (i) the increase in the total number
of authorized shares of Class A Common Stock of the Company
(Class A Common Stock, and such shares
Class A Common Shares) to
120,000,000(the Capitalization
Proposal), (ii) the issuance of all Class A
CommonShares issuable upon conversion of the Series A Preferred
Shares (the Conversion Proposal),
subject to certain limitations in the Certificate of Designations
and (iii) a reverse stock split of the Class A Common Stock
(together with the Capitalization Proposal and the Conversion
Proposal, the Proposals), is not
obtained by the six month anniversary of the Closing Date, the
Dividend Rate will increase to an annual rate of 15%.
Additionally, the Holders are entitled to receive any dividend
declared and paid to holders of shares of Common Stock (the
Common Stockholders) as if the Series A
Preferred Shares owned by such Holders had been converted into
Class A Common Shares to the terms of the Certificate of
Designations on the record date for such dividend.
Subject to certain exceptions, in the event that the Company
fails to (i) pay to the Holders any Series A Preferred Dividend
to which they are entitled, (ii) redeem any Series A Preferred
Shares in connection with the Equity Rights Offering (as defined
below) in accordance with the Purchase Agreement or (iii) redeem
any Series A Preferred Shares upon written notice of any Holder
from and after November 1, 2020 in accordance with the
Certificate of Designations, from and after such time, the
Company may not (a) declare or pay any dividends or other
distribution upon any other securities of the Company or its
subsidiaries or (b) redeem, purchase or otherwise acquire any
other equity securities of the Company or its subsidiaries.
Upon obtaining Stockholder Approval of the Proposals, the
outstanding Series A Preferred Shares will automatically be
converted into the number of Class A Common Shares (the
Conversion Amount) determined by
dividing the stated value of $1,000.00 per share (the
Stated Value) of the number of Series
A Preferred Shares being so converted by the product of the
closing price of the Class A Common Stock on the New York Stock
Exchange on Closing Date and 0.90(the Conversion
Price), subject to certain adjustments, including
customary anti-dilution adjustments; provided, that (i) if upon
conversion of such Series A Preferred Shares, the Holders
(together with their affiliates) would own greater than 39.9%
of the outstanding Class A Common Shares (on an as converted
basis and subject to certain adjustments, including customary
anti-dilution adjustments) in the aggregate, then only the
Series A Preferred Shares that would equal 39.9% of the
outstanding Class A Common Shares (on an as converted basis and
subject to certain adjustments, including customary
anti-dilution adjustments) will convert, it being agreed by the
parties that for so long as any Holder holds Series A Preferred
Stock, the amount of Class A Common Shares that such Holder
will be entitled to receive upon any such conversion of Series
A PreferredShares will equal (a) the number of Class A Common
Shares that such Series A Preferred Stock will be converted
into multiplied by (b) the percentage that is equal to such
Holders Initial Investment Percentage (as defined below) and
(ii) with respect to each Holder, an amount of Series A
Preferred Shares, with an aggregate Stated Value equal to the
product of $15,000,000.00 multiplied by the percentage (the
Initial Investment Percentage)
obtained by dividing (a) the number of Series A Preferred
Shares purchased from the Company by such Holder by (b) the
aggregate number of Series A Preferred Shares issued by the
Company, shall remain outstanding until redeemed to Section 5.3
of the Purchase Agreement. However, in no
event shall the Series A Preferred Shares convert into Class A
Common Shares if such conversion would result in a Change of
Control as defined in and under the Companys Indenture, dated
as of March 12, 2012 (the
Indenture).In the event that the
Stockholder Approval of the Capitalization Proposal and the
Conversion Proposal is not obtained at the first meeting of the
stockholders of the Company held for such purpose, a Holder
may, at any time thereafter, in its sole discretion, elect to
convert Series A Preferred Shares into the number of Class A
Common Shares equal to the Conversion Amount (subject to
certain adjustments, including customary anti-dilution
adjustments), subject to a maximum amount of Class A Common
Shares equal to the product of (i) 5,375,797Class A Common
Shares and (ii) the percentage equal to the Initial Investment
Percentage of each Holder, with respect to all conversions of
Series A Preferred Stock by such Holder. Upon the conversion of
any Series A Preferred Shares, the Company must issue to the
Holder thereof any accumulated and unpaid Series A Preferred
Dividends on such Series A Preferred Shares, to be paid, at the
election of the Holder, in the form of cash or Class A Common
Shares in an amount equal to the Conversion Price.
In addition, the Holders will be entitled to vote on all
matters submitted for a vote of the Common Stockholders, voting
together with the Common Stockholders as one class. The Holders
will be entitled to the number of votes equal to the number of
votes to which the Class A Common Shares issuable upon the
conversion of the Series A Preferred Shares would have been
entitled if such Class A Common Shares had been outstanding at
the time of the applicable vote and related record date;
provided, however, that (i) in no event shall the voting rights
of the Holders in the aggregate exceed 39.9% of the outstanding
Class A Common Shares (on an as converted basis and subject to
certain adjustments, including customary anti-dilution
adjustments), it being agreed by the parties that if the
aggregate voting rights of the Holders would exceed 39.9% of
the outstanding Class A Common Shares (on an as converted basis
and subject to certain adjustments, including customary
anti-dilution adjustments), the voting rights of each Holder
will equal the voting rights such Holder would have had if such
Holder held such number Class A Common Shares equal to the
product of (a) the number of Class A Common Shares (subject to
certain adjustments, including customary anti-dilution
adjustments) equal to 39.9% of the Class A Common Shares
outstanding on the applicable date of any vote therefor
multiplied by (b) the percentage that is equal to such Holders
Initial Investment Percentage and (ii) prior to obtaining the
Stockholder Approval with respect to the Conversion Proposal,
the voting rights of a Holder shall not exceed the voting
rights such Holder would have had if such Holder held such
number of Class A Common Shares equal to the product of (a)
5,375,797Class A Common Shares (19.9% of the outstanding Class
A Common Shares as of the date hereof), subject to certain
adjustments, including customary anti-dilution adjustments and
(b) such Holders Initial Investment Percentage. Notwithstanding
the foregoing, the Holders are not entitled to vote on the
Proposals.
So long as any Series A Preferred Shares are outstanding, the
written consent of the Holders of at least a majority of the
outstanding Series A Preferred Shares will be necessary for
effecting or validating, among other things: (i) any issuance
of stock senior to or on parity with the Series A Preferred
Stock; (ii) any amendment to the Companys Certificate of
Incorporation that would adversely affect any right,
preference, privilege or power of the Series A Preferred Stock;
(iii) the declaration or payment of any dividend or other
distribution, whether in cash, property, securities or a
combination thereof, with respect to any of the equity
interests of the Company or any of its subsidiaries; (iv) the
redemption, purchase, retirement or other acquisition for value
of any of the equity interests of the Company other than Series
A Preferred Stock or set aside any amount for any such purpose;
(v) a change in the stock exchange on which the Common Stock is
listed; (vi) any voluntary or involuntary liquidation,
dissolution or winding up or similar insolvency event of the
Company; or (vii) any amendment or modification of the
Indenture or (viii) any agreement to do or consent to any of
the foregoing.
Additionally, until Stockholder Approval of the Proposals is
obtained, the Company and its subsidiaries may not, without the
written consent of the Holders of at least a majority of the
outstanding Series A Preferred Shares: (i) settle or consent to
any settlement, judgment or award in any litigation,
arbitration or proceeding if such settlement, judgment or award
involved a guilty plea or any other acknowledgement of criminal
wrongdoing that would reasonably be expected to result in an
aggregate uninsured liability of $5,000,000.00; (ii) engage in
any material respect in any business or business activity
materially different from any business or business activity
conducted on November 23, 2016; (iii) incur any indebtedness or
any other obligation or liability, other than (a) the
obligations under the Companys Certificate of Incorporation
(including the Certificate of Designations), the Investors
Agreement and the Purchase Agreement and (b) any indebtedness,
liability of obligation, in each case, as permitted under the
Term Loan Agreement and the New Revolving Credit Agreement;
(iv) create any lien or other encumbrance upon any property or
assets of the Company; or (v) enter into any agreement to do or
consent to any of the foregoing.
In connection with the Private Placement, the Company
launched a cash tender offer (the Tender
Offer) for not less than $250,000,000 and up to
$300,000,000 aggregate principal amount of the Companys
existing 6.375% Senior Notes due 2022 (the
Notes). The Closing of the Private
Placement is conditioned upon, among other things: (i) Raging
Capital tendering into the Tender Offer one-hundred percent
(100%) of the Notes held by Raging Capital and its
affiliates, (ii) a minimum of $250,000,000 in aggregate
principal amount of the Notes being tendered in the Tender
Offer (or such condition being waived by each Investor) (the
Minimum Tender Condition), (iii)
the satisfaction of all other conditions to the Tender Offer
(with any waiver of such conditions by the Company subject to
the written consent of each Investor), (iv)the closing of a
$100 million term loan facility between the Company and the
Investors, (v) the closing of a $100 million revolving credit
facility between the Company and the Investors and (vi)
simultaneously or substantially concurrently with the
Closing, the redemption of all of the Notes that are tendered
into the Tender Offer. The Purchase Agreement also contains
representations and warranties and other provisions customary
for transactions of this nature. Additionally,the Purchase
Agreement contains a condition to the obligations of the
Investors to purchase the Series A Preferred Shares that the
Company provide all documentation and other information
relating to the Company’s representation regarding its
solvency.
Additionally, to the Purchase Agreement, the Company must (i)
commence and complete within six months following the Closing
Date an equity rights offering (the Equity Rights
Offering, and together with the Private
Placement and the Tender Offer, the
Recapitalization Transactions) for
shares of Class A Common Stock and (ii) no later than one
business day following consummation of the Equity Rights
Offering, use the proceeds of the Equity Rights Offering to
redeem the Series A Preferred Shares held by the Investors in
an aggregate amount equal to the lesser of (a) 100% of the
proceeds of the Equity Rights Offering and (B) $15,000,000.
to the Purchase Agreement, at the Closing, the Company and
GulfMark Americas, Inc., as co-borrowers (the
Co-Borrowers), will enter into both
(i) a term loan agreement, to which the lenders party thereto
will provide term loans (the Term
Lenders) in the amount of $100 million (the
Term Loan Agreement), and (ii) a
revolving credit facility, to which the revolving lenders
party thereto (the New Revolving
Lenders) will provide revolving loans not to
exceed $100 million outstanding at any time (the
New Revolving Credit Agreement).
In connection with the Term Loan Agreement, the material
documents to be executed and delivered by the Co-Borrowers
(or which the Co-Borrowers will cause to be executed and
delivered):
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Pledge instruments and ship mortgages to which the |
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ii. |
An assignment of rights to proceeds of casualty |
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iii. |
Guarantees of the Term Loan Agreement obligations by |
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One or more promissory notes (if requested) to evidence |
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v. |
An intercreditor agreement establishing the rights and |
In connection with the New Revolving Credit Agreement, the
Co-Borrowers will execute and deliver (or cause to be
executed and delivered):
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i. |
Pledge instruments and ship mortgages to which the |
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ii. |
An assignment of rights to proceeds of casualty |
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iii. |
One or more promissory notes to evidence the |
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iv. |
A revolving loans payoff letter from the |
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An intercreditor agreement establishing the rights |
If the Purchase Agreement is terminated and the Company
consummates an Alternative Financing (as defined in the
Purchase Agreement) on or prior to March 27, 2017, then the
Company shall pay to the Investors an aggregate cash
payment equal $5,000,000. If the Purchase Agreement is
terminated by the Investors because the Minimum Tender
Condition has not been satisfied, then the Company shall
pay the Investors a fee equal to $4,000,000 with (i) 75% of
such fee payable in cash by wire transfer of immediately
available funds and (ii) 25% of such fee payable in shares
of common equity, in each case within three business days
of the such termination.
The foregoing description of the Purchase Agreement does
not purport to be complete and is qualified in its entirety
by reference to the Purchase Agreement, a copy of which is
filed as Exhibit 10.1 to this Form 8-K and is incorporated
by reference in this Item 1.01.
Voting Agreement
On November 23, 2016the Company entered into a Voting
Agreement (the Voting Agreement)
with Raging Capital Management, LLC (Raging
Capital), David J. Butters, Quintin V. Kneen
and James M. Mitchell (the
Stockholders) to which the
Stockholders have agreed to, among other things, vote (or
cause to be voted), or deliver an irrevocable written
consent covering, all shares (Covered
Shares) of voting capital stock and any
securities convertible into voting capital stock owned by
such Stockholder: (i) in favor of the approval of the
Proposals, the Recapitalization Transactions and the
adoption of the documents and agreements to be executed in
connection with the Recapitalization Transactions (together
with the Certificate of Designations, the Registration
Rights Agreement to be entered into by the Company and the
Investors in the form attached to the Purchase Agreement as
Exhibit E and the Investors Agreement in the form attached
to the Purchase Agreement as Exhibit D, the
Definitive Documents); (ii)
against any action, proposal, transaction or agreement that
would reasonably be expected to result in the failure to
obtain Stockholder Approval of the Proposals or breach of
the Definitive Documents; and (iii)against any action,
agreement or transaction that is intended, or could
reasonably be expected, to materially impede, interfere
with, delay, postpone, discourage or adversely affect the
meeting of the stockholders of the Company to be held for
the purpose of voting on the Proposals, the Proposals or
the Recapitalization Transactions or the adoption of the
Definitive Documents or any of the other transactions
contemplated thereby. Additionally, each Stockholder has
agreed not to sell, transfer or otherwise dispose of any of
such Stockholders Covered Shares. Each Investor is a third
party beneficiary of the Voting Agreement and can enforce
the provisions thereof.
The Voting Agreement will terminate upon the earlier to
occur of (i) the later of (a) Stockholder Approval of the
Proposals, (b) the consummation of all of the
Recapitalization Transactions and (c) such time as each
Investor is no longer entitled to appoint or nominate
directors to the Board to the Definitive Documents and (ii)
the date of termination of each of the Definitive Documents
in accordance with their respective terms.
The foregoing description of the Voting Agreement does not
purport to be complete and is qualified in its entirety by
reference to the Voting Agreement, a copy of which is filed
as Exhibit 10.2 to this Form 8-K and is incorporated by
reference in this Item 1.01.
Tender Support Agreement
On November 23, 2016the Company entered into a Support
Agreement (the Tender Support
Agreement) with Raging Capital regarding
the Tender Offer, to which Raging Capital has agreed to,
among other things: (i) tenderone-hundred percent (100%)
of the Notes held by Raging Capital and affiliatesin the
Tender Offer and (ii) fully subscribe for an amount of
Class A Common Shares equal to its initial pro rata
allocation of Class A Common Shares available for
purchase in the Equity Rights Offering. Additionally, to
the terms of the Tender Support Agreement, Raging Capital
has agreed not to sell, transfer or otherwise dispose of
(i) subject to certain exceptions, any Notes owned by
Raging Capital and (ii) any rights of Raging Capital in
connection with the Equity Rights Offering.
The rights and obligations of the Company and Raging
Capital will terminate on the earliest of: (i) November
24, 2016, if the Tender Offer has not commenced by such
date; (ii) forty-five days after the commencement of the
Tender Offer if the conditions set forth in the
definitive documents regarding the Tender Offer are not
satisfied or waived by such date, as applicable; and
(iii) the Company providing notice to Raging Capital in
writing that it has determined that it will not proceed
with, or has determined to terminate the Tender Offer, or
that it has modified the terms of the definitive
documents regarding the Tender Offer in a way that will
materially adversely affect Raging Capital in a manner
that is disproportionate to the other holders of Notes
participating in the Tender Offer without the prior
written consent of Raging Capital. Each Investor is a
third party beneficiary of the Tender Support Agreement
and can enforce the provisions thereof.
The foregoing description of the Tender Support Agreement
does not purport to be complete and is qualified in its
entirety by reference to the Tender Support Agreement, a
copy of which is filed as Exhibit 10.3 to this Form 8-K
and is incorporated by reference in this Item 1.01.
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Item 2.03 |
Creation of a Direct Financial Obligation |
The information set forth in Item1.01 of this Current
Report on Form 8-K under the heading Securities Purchase
Agreement is incorporated by reference in this Item2.03.
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Item 3.02 |
Unregistered Sales of Equity |
The information set forth in Item1.01 of this Current
Report on Form 8-K under the heading Securities Purchase
Agreement is incorporated by reference in this Item 3.02.
The Private Placement of the shares of Preferred Stock to
the Purchase Agreement will be undertaken in reliance
upon an exemption from the registration requirements of
the Securities Act, to Section 4(a)(2) thereof and Rule
506 of Regulation D promulgated thereunder.
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Item 7.01 |
Regulation FD Disclosure. |
On November 23, 2016, the Company issued a press release
announcing the commencement of the Tender Offer. The
Tender Offer is subject to the terms and conditions set
forth in the Offer to Purchase dated November 23, 2016,
and the related Letter of Transmittal. A copy of the
press release is furnished as Exhibit 99.1 to this
Current Report on Form 8-K and incorporated by reference
herein.
The information contained in this Item 7.01 (including
Exhibit 99.1) is being furnished and shall not be deemed
filed for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the
Exchange Act), or otherwise
subject to the liabilities of that Section. The
information contained herein under Item 7.01 (including
Exhibit 99.1) shall not be incorporated by reference into
any registration statement or other document to the
Securities Act or the Exchange Act, except as shall be
expressly set forth by specific reference in any such
filing.
Certain statements and information in this reportand
other publicly available documents, including the press
release attached as Exhibit 99.1, that are not
historical factsmay constitute forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995.The words believe,
expect,expected to be,anticipate, plan, intend,
foresee,forecast, continue, can, will, will continue,
may,should, would, could or other similar expressions
are intended to identifyforward-looking statements,
which are generally not historical in nature.
Statements in this report that containforward-looking
statementsmay include, but are not limited to,
statements regarding the (i) Closing, (ii) the Tender
Offer, (iii) the terms of the Certificate of
Designations, (iv) the entrance into the Term Loan and
(v) the entrance into the New Credit
Facility.Theseforward-looking statementsare based on
our current expectations and beliefs concerning the
Closing, the Tender Offer, the terms of the Certificate
of Designations, the entrance into the Term Loan and
the entrance into the New Credit Facility and other
related future events and conditions.No
assurance, however, can be given that such expectations
will prove to have been correct. A number of factors
could cause actual results to differ materially from
the projections, anticipated results or other
expectations expressed in this report, including the
satisfaction of all conditions set forth in the
Purchase Agreement, not all of which are within our
control, and other material factors that are described
from time to time in the Companys filings with the SEC,
including the Companys Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K. Consequently, theseforward-looking
statementsshould not be regarded as representations
that the projectedor anticipatedoutcomes can or will be
achieved. Theseforward-looking statementsspeak only as
of the date hereof.We undertake no obligation to
publicly update or revise anyforward-looking
statementsafter the date they are made, whether as a
result of new information, future events or otherwise.
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Item 9.01 |
Financial Statements and |
(d)Exhibits.
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Exhibit Number |
Description |
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10.1 |
Securities Purchase Agreement dated November 23, |
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10.2 |
Voting Agreement dated November 23, 2016 by and |
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10.3 |
Tender Support Agreement dated November 23, 2016 |
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99.1 |
Press Release of GulfMark Offshore, Inc. dated |
About GULFMARK OFFSHORE, INC. (NYSE:GLF)
GulfMark Offshore, Inc. provides offshore marine support and transportation services. The Company offers these services to companies engaged in the offshore exploration and production of oil and natural gas. The Company operates in three segments: the North Sea (N. Sea), Southeast Asia (SEA) and the Americas. Its vessels transport materials, supplies and personnel to offshore facilities, as well as move and position drilling and production facilities. The operations are conducted in the North Sea, offshore Southeast Asia and offshore in the Americas. It operates a fleet of over 70 owned or managed offshore supply vessels (OSVs), which include over 30 vessels in the North Sea, over 10 vessels offshore Southeast Asia and over 30 vessels offshore the Americas. Its customers include oil and natural gas companies, independent oil and natural gas exploration and production companies working in international markets, and foreign Government-owned or controlled oil and natural gas companies. GULFMARK OFFSHORE, INC. (NYSE:GLF) Recent Trading Information
GULFMARK OFFSHORE, INC. (NYSE:GLF) closed its last trading session 00.00 at 1.45 with 130,027 shares trading hands.
