https://x.com/rckhlldd/status/1843301160242835870?s=46 |
Ok, cheers |
From what I have heard, some of the holders (those to which GMS shares have / are being / will be distributed to) are a mixture of UHNWI family offices, and even the Qatari Royal Family (that last one is interesting as QE is a big customer of GMS). This is consistent with GS being one of the houses selling the shares yesterday - despite never having played in a name this small. Makes sense that GS would look after money and affairs for some of these UHNW family office types, so that checks out. APPEARS (though I'm at risk of looking even more silly than usual) that the overhang in the short term has cleared a touch, and vols returning to something like normal. |
Stemis - I don't know what his holding is now but there were significant corporate events in at least 2009 and 2014 that would have diluted his stake. |
Cordia Group acquired Seafox in 2005.
Seafox then merged with (or was bought by) Millennium Offshore in 2014
Millennium Offshore is owned by HM MOS International:
"The Principal investors in HM MOS International Limited include, amongst others, a GCC Sovereign Wealth Fund, MENA Regional Family Offices and also MENA Regional High Net Worth Individuals." |
I though Cordia owned Seafox |
whites...
always nice to read a comment where an obviously calm investor lays out the simplicity to a thesis. at the end of the day, this is a company where the fundamentals are booming. investors are being given an extraordinary chance to top up at c.14p and a 50% discount to NAV (with leverage reducing quickly, that is a very conservative way to look at the discount!).
horrible to wake up and see yourself losing thousands. but this should be a situation where those with patience and nerves are rewarded handsomely. |
From todays TR1
"This is not a sale of GMS Shares by Seafox, it is transfer of shares as a part of the 150m GMS share Distribution to Seafox Shareholders which will take place over the next few weeks and as per 4th Sept RNS Number: 7900C."
Looks like the overhang will persist for the "next few weeks". Ive got some buy orders in at quite cheeky prices. Illiquidity often equals opportunity. |
 Im a buyer and supporter of GMS Gulf Marine Services for several reasons, especially considering recent selling activity by Seafox, via distribution, which presents a strategic opportunity for investors.
The offshore support vessel sector, providing critical services to the oil and gas, and renewable energy industries, is experiencing renewed growth due to rising energy demand and global energy transitions.
The ongoing selling by Seafox (By Distribution) a key shareholder, could be seen as a short-term negative. However, this presents a valuable opportunity for the market as shares transition from investors with little confidence (or strategic interest) in holding, to those who are bullish on GMS’s long-term potential. This transfer of shares is going to lead to a more committed shareholder base, driving stronger price support and stability.
With a leaner cost structure and improving industry fundamentals, GMS is positioned for growth, and the shift of shares into stronger hands sets the stage for enhanced investor focus and performance gains.
Never thought I would be presented with an opportunity to top up at these kind of levels. So happy to be adding. |
hpcg1 Oct '24 - 12:15 - 2527 of 2528.
Sure but the fact is that the shares are hitting the market immediately or so it seems hence the high volume the last 3 days.
The sooner they're out the better.
It doesn't mean GMS can't buy them in. Just say to their broker they'll buy everything at 15p or under and it's all dealt with.
Nb I've bought a lot today to add to my holding and will add as it goes lower.
Seriously half of NAV....(29p). |
xxx1 Oct '24 - 12:10 - 2525 of 2526
It's all about the bank covenants. As things stand I understand they will not move until the later part of 2025.
Bonkers. Buy back the shares now for a pittance (take Seafox out at 14p or whatever). Hugely accretive to earnings and doubtless therefore to their bonus pot. Surely they can see that!? The plus also for us poor shareholders we watch this rocket back to 20p. |
elsa7878 - Seafox isn't selling any shares. It is distributing its shares in GMS to its own shareholders until it gets down to a 10% holding. The availability in the market is one or more of those recipients selling. |
If it's now under 90 million shares. It's under £13 million. Surely there MUST be some institutions out there who must think it's a decent investment. Around here it is 50% of NAV! |
hcpg, yes there is a strong element of shiny new toys about increasing capacity. Management get more assets to play with, customers are enthusiastic and shareholders pay either by deferring dividends or cash calls or both plus borrowings.
So it is important to keep management on track. The maths is straighforwards and yes, they want to get the nett leverage ratio down to 1.5 before acting, but there is nothing magical about this figure, we pay ~8% on debt and buying in shares moves value strongly in favour of the remaining holders. Hence my suggestion for holders to contact the board and express their preferences and reasoning. |
I can't see how this isn't going lower until everything evens itself out |
90 million to go..... |
You can say that again.
It's no wonder it's falling like it is, buys are registering as sells. Mine just did. |
Thanks for that. This relentless selling is unnerving but the business is fundamentally sound so guess we just have to make it play out. |
elsa7878 - I would say these aren't cyclical any more. I went through 4 cycles in oil services and they were near enough identical with the exception of the pandemic. We have seen very little new build of equipment post the pandemic because a) balance sheets needed to recover, b) oil production is peaking and one can't put a 20 year business plan together, c) US onshore has added a high frequency response to lower oil prices and all the cyclicality lives there, d) shipyards have been full of container ship orders.
Oil services cripple themselves each cycle once oil companies have rebuilt their own balance sheets and go into expansion mode. Prices go sky high in the spot market and some capacity is booked out for several years to come. People that run oil services companies are some of the most gung-ho one could ever meet and they extrapolate these prices and this activity forever, meanwhile their employees who've seen it all before shake their heads. I have literally heard execs I worked for saying things like, "if we don't build it someone else will". It is why after I'd been through my first Chapter 11 I started preparing for an ultimate and inevitable redundancy! As I say the splurge has not happened in this sector this time which means they cycle will either not happen or be shallow. |
This makes all good sense to me and is consistent with how I'm viewing the situation through conversations with all involved parties. Worth noting that I'm not expecting a change in capital allocation (e.g. payment of a div / buybacks / new vessel purchases) until debt is more of the 1-1.5x. That's likely at this rate to be mid next year some stage, I believe.
As for why only another 5m to be sold - that's simply because not ALL of the 150m distributed is to be sold. If it was, why didn't Seafox simply place them and then distribute cash? The very fact they have done it this (slightly unorthodox) way shows you that many of the Seafox holders (who are now, in turn, direct GMS holders)do NOT want to sell at this level. Ergo, overhang is overdone. This will shortly be cleared (if it hasn't since my earlier post) - I had somewhere like 18-20m of the 150m to be sold initially, and then the natural selling pressure across market today sweeps up the rest. Overhang soon done in summary. Good chance to get in / top up if haven't already (which I have done - so not just hollow words from me), and good news for holders that this 'technical' brake on the share price should soon be lifted.
Stick these in a tin under the bed, revisit in 5 years. Not going to lose sleep over some minor fluctuations here |
The company should sell a vessel now. Pay off a some of the debt and instigate a buy back of say $20-$30 million. That would take out the Seafox shares and some of the warrant holders (not all will want to sell) and indicate strongly that a valuation at or near to 50% of NAV is ridiculous.
Talk of buying additional vessels is absurd and in itself has been damaging. They should clarify this asap (like they have in private apparently).
If they navigate this cycle successfully (as they seem to be doing) they could then reinvest at the cycle lows. |
Jsg123 - Seafox, a private company, talked to its shareholders about how best to distribute its share holding in GMS. Presumably some said, we'd like in-specie as we don't want any more given away at 17p. Others presumably said, we'd like in-specie because we want to convert some or all to cash. Whichever, the owners of Seafox, in majority, decided they wanted most of the GMS holding distributed with a rump held so that Seafox has influnece over GMS and no one does anything stupid like build new vessels. thebd11 would know a lot more so thank you for some more information.
So far as I am aware the company does not need to ask permission from lenders to buy back shares now even. It shouldn't do until the leverage ratio is below 2 and interest is minimised. I think it does still require permission to pay a dividend, but will not once the new financing agreement has been executed.
Its my opinion here, but I think companies should always distribute large shareholdings to their shareholders. It always reduces the overhang if a few want to exit. |
Why only another 5 million at this price? Are you talking about the stock seafox sold?
Isn't there another 120 mill to be distributed? |
14m chunk gone through at lunchtime.The overhang being chewed away at, meanwhile those shares transferred to safer and presumably longer term hands.It's a sit on hands time for now, or accumulate if you have the cash. |
Agree with this completely. Failed takeover from Seafox, who (from what I've heard) then ahd THEIR shareholders disagree over how they should handle their stake. In the absence of reaching a consensus, Seafox decided (quite smartly IMO) to distribute the shares in specie to allow their individuals to then decide. Clever politics, and unsurprising that some of the individual investors in Seafox want just to cash in. I'm led to believe that these people are Middle Eastern large family offices, some royal families etc etc, so this is just chump change to them.
I can't see more than another 5m at this price available, so overhang should be cleared soon! |
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