A struggling company which maintains oil rigs has convinced lenders to not cut its loans until the end of the year, management revealed this morning.
Banks have agreed to roll over Gulf Marine Services’s existing $25m (£20m) capital facility and others which will keep it liquid and support growth until the end of 2019.
“This agreement is an important step towards providing a long-term sustainable financing structure for the business as we continue to deliver our strategic repositioning plan,” said executive chair Tim Summers.
Gulf has been one of the most high-profile victims of a squeeze in the oil services industry.
The company provides platforms and ships used to repair and maintain oil rigs.
But Gulf and its peers were hit in 2014 when the oil price crashed. In the years building up to the downturn, Gulf and others had positioned themselves to service an oil industry flush with cash.
But now, with a lower oil price, these companies are stranded with too many costly assets and too little demand, analysts say.
Gulf’s shares dropped an astounding 75 per cent in one day last December as it warned it would not meet obligations to lenders.
Shares, which listed at 130p in March 2014, hit as low as 8.04p on the day in December. They have since fallen further, closing at 5.39p yesterday.
However this morning’s news proved a booster injection for the patient, sending shares up as much as 20.6 per cent to 6.5p.
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Gulf Marine said it was continuing to speak to lenders to find a “long-term solution” to its capital structure. It hopes to amend and extend its loans before the end of the year.
It expects to announce a set of delayed full-year results on Monday.