Global Energy buys 11 vessels as it transitions to subsea services

16th Jan 2017 14:47

(ShareCast News) - Global Energy Development announced on Monday that it has conditionally agreed to purchase 11 offshore subsea service vessels and a barge vessel as it seeks to adopt a new business strategy focusing on the subsea oilfield services sector.The AIM-traded company confirmed it has entered into two share purchase agreements to acquire a total of 11 offshore service vessels, a barge vessel and other related equipment through the purchase of 100% of the issued shares in vessel-owning companies.It said all vessels are currently located in Louisiana, US, with direct access to the offshore oil and gas fields in the Gulf of MexicoThe acquisitions would mark a "fundamental change" in Global's business strategy, its board said, as the transactions are the company's first step into the global subsea industry.It said it was seeking to make counter-cyclical investments within the global subsea industry that will enable it to capitalise on future recoveries in the oil price and related increased requirements for offshore support servicesThe vessels will be able to operate in depths of up to 300 feet and, in the case of one vessel up to 5,000 feet, opening a large addressable market for the company.Global will issue Convertible A Loan Notes for a near-term cash injection of $10.5m, resulting in a strengthened balance sheet allowing it to further pursue the new business strategyThe notes of $10.5m, when fully issued, will have a 50p conversion price, coupon of 8% and a maturity date of 1 January 2027.Global's board also proposed to change the company's name to Nautilus Marine Services to reflect the new business strategy.The transactions represent a reverse takeover that will be subject to a vote of Global's shareholders."We are very pleased to have committed to these acquisitions of the offshore service vessels in the Gulf of Mexico," said chairman Mikel Faulkner."This represents the company's first step towards delivering on the ... new strategy of increasing shareholder value by targeting investment and acquisition opportunities in the subsea services sector with the potential for significant upside."