NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.
Ålesund, 19 June 2020: Golden Energy Offshore Services (ticker: GEOS-ME) (the “Company”) contemplates to carry out a private placement of new shares (“New Shares”) with the objective of raising gross proceeds of minimum NOK 10,000,000 with an upper limit of the capital increase will of NOK 35,415,872 at subscription price per New Share of NOK 1 (the “Private Placement”).
In light of recent developments in the offshore service market (which has resulted in three of the Company’s four vessels having been placed into temporary layup), the board recognizes that it will need to increase its liquidity position to be able to continue operation if the downturn in the market should worsen or remain as-is of today over some time.
Furthermore, the Company’s subsidiaries purchased two vessels, Energy Empress and Energy Duchess (the “Vessels”), in 2018 from Nantong Rainbow Offshore & Engineering Equipment Co., Ltd. (“ROC”), and subsequently entered into a down payment agreement with ROC in 2019 for the Vessels. Based on the original payment schedule, the Company’s subsidiaries were soon due to pay the 1st anniversary lease payments for the Vessels pursuant to the amended hire purchase agreements for the Vessels, and these anniversary lease payments are guaranteed by the Company and secured by a mortgage over Energy Scout.
The Company has reached an agreement with ROC for the postponement of a part of the anniversary lease payments on the following terms:
• The Owners shall pay USD 600,000 per Vessel as a partial downpayment on the 1st anniversary lease payment,
for which ROC will issue a commercial invoice due 11 July 2020;
• the balance 1st anniversary payments of USD 1,067,000 per Vessel shall be paid by the Owners at the latest
together with the 2nd anniversary payment (respectively) and shall carry an interest of 8% p.a. from the
original due date of the 1st anniversary payments and until finally settled; and
• the mortgage over the vessel Energy Scout shall continue in full force and effect until the 1st anniversary
payments have been settled in full.
The share capital increase will be used – and is necessary - to cover the downpayments on the vessels, and the surplus (if any) will further be used as working-capital in the Company.
Should the lower limit of the share capital increase as described above be subscribed for, but not the maximum upper limit, the Company will, as a second measure, give the board a right to issue the balance number of shares – or the maximum allowable amount up to the balance number of shares – within 6 months against a payment of at least NOK 1.25 per share in order to increase the Company’s share capital further if deemed desirable by the board (acting in their discretion).
The Private Placement will be made in reliance on relevant exemptions from prospectus requirements and is intended to be resolved by an extraordinary general meeting scheduled to take place on 26 June 2020 (the “EGM”). The Private Placement will be directed at (i) existing shareholders in the Company at the time of the EGM resident in a jurisdiction where such offering would not be unlawful or would require any prospectus, filing, registration or similar action (“Eligible Shareholders”), and (ii) certain professional investors with a minimum application and allocation amount exceeding the NOK equivalent of more than EUR 100,000 who may lawfully participate in the Private Placement. Allocation of New Shares is at the discretion of the Company’s board of directors, ensuring that subscriptions by Eligible Shareholders are given preference, to the degree possible and practical, in accordance with the allocation principles for rights issues. Further allocation is at the discretion of the Company’s board of directors.
The application period for the Private Placement commences on 19 June 2020 at 17:00 CET and ends at the time of the EGM. Applicants wishing to apply for New Shares must contact Per Ivar Fagervoll (cf. details below).
Completion of the Private Placement is subject to i) all necessary corporate resolutions being validly made by the Company, including without limitation approval by the EGM, ii) the minimum subscription amount being subscribed for, and ii) payment being received for the allocated New Shares to be issued in the Private Placement. The Private Placement can be terminated at any time and for any reason.
The Company has decided to convene the EGM to approve the share capital increase pertaining to the Private Placement. See enclosed the full notice for the EGM which also includes more details of the expected revised terms for acquisition of the Vessels.
Advokatfirmaet BAHR AS is acting as legal advisor in the Private Placement.
For further information, please refer to the summons to the EGM attached to this announcement, or please contact:
Per Ivar Fagervoll
pif@geoff.no
mobile + 97428884
Important Notice
The contents of this announcement have been prepared by, and are the sole responsibility of, the Company. The Company's financial advisors are acting exclusively for the Company and no one else, and will not be responsible to anyone other than the Company for providing the protections afforded to its respective clients, or for advice in relation to the contents of this announcement or any of the matters referred to herein.
The distribution of this announcement and other information in connection herewith may be restricted by law in certain jurisdictions. The Company assumes no responsibility in the event there is a violation by any person of such restrictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about, and to observe, any such restrictions. This announcement may not be used for, or in connection with, and does not constitute, any offer of securities for sale in the United States or in any other jurisdiction.
This announcement does not constitute any offer and the Company will not be making any offer in any jurisdiction or in any circumstances in which such offer or solicitation would be unlawful. This announcement is not for distribution, directly or indirectly in or into any jurisdiction in which it is unlawful to make any offer or solicitation to such person or where prior registration or approval is required for that purpose. No steps have been taken or will be taken relating to the information in this announcement in any jurisdiction in which such steps would be required. Neither the publication and/or delivery of this announcement shall under any circumstances imply that there has been no change in the affairs of the Company or that the information contained herein is correct as of any date subsequent to the earlier of the date hereof and any earlier specified date with respect to such information.
This announcement is not for publication or distribution, directly or indirectly, in the United States (including its territories and possessions, any state of the United States and the District of Columbia). This announcement does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. The shares to be issued in the Possible Placement have not been and will not be registered under the United States Securities Act of 1933, as amended (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to, or for the account of, U.S. persons (as such term is defined in Regulation S under the US Securities Act), except pursuant to an effective registration statement under, or an exemption from the registration requirements of, the US Securities Act. All offers and sales outside the United States will be made in reliance on Regulation S under the US Securities Act. There will be no public offer of securities in the United States.
This announcement does not constitute an offering circular or prospectus in connection with an offering of securities of the Company. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in investor material made available by the Company only to qualified persons in certain jurisdictions where an offer may be made (if an offer is made). This announcement does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for, any securities and cannot be relied on for any investment contract or decision.
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements.