Global Marine Energy losses deepen
YORKSHIRE-BASED oilfield services company Global Marine Energy today admitted that its losses will deepen in the current year ahead of its expected takeover by Hong Kong group EMER.
The Shipley firm, which supplies equipment for offshore oil drilling and exploration, said that the £11.6m takeover offer from drilling group EMER was "progressing" and should be completed by February 4.
However it said that despite more than doubling turnover to £14.5m from £6.1m in the six months to September 30, its half-year operating losses increased to £2.95m from £2.55m for the same period last year.
Chairman Brent Fitzpatrick said that the bulk of the losses – £1.6m – was down to provisions for losses on future crane contracts.
He said that Global Marine had restructured its management team and appointed Bob Will as acting chief executive to replace Paul Findlay who stepped down at the end of last month.
Global Marine has also made changes to the management of its Houston-based US operation who would review and renegotiate existing contracts to improve returns from the current order book.
Going forward Mr Fitzpatrick said that the firm would only take on contracts where it could see a clear profit.
He said: "The group still faces challenging times ahead but, now that we have secured finance for our ongoing working capital requirements, GME is on a firmer
financial footing upon which we can build. We are operating in a buoyant marketplace and there is strong demand for GME's quality products and after
sales' services worldwide. We now need to focus on achieving profitable sales growth."
Prior to the offer from EMER, Global Marine had agreed to a reverse takeover by IDM Group of the United States in October.
EMER is a holding company with several subsidiaries in the US and China.
Through its subsidiaries EMER engineers, develops, manufactures and supplies drilling related products to customers worldwide. It is valued at more than £100m.
Emer believes the acquisition of Global Marine would strengthen the Yorkshire company's management and help it to tackle challenges with working capital, commercial contracting and product delivery.
It also believes it can renegotiate Global Marine's existing Chinese contracts to reduce its losses in that market.
A strategic review carried out by Global Marine last December concluded that shareholder value could be maximised if the company became part of a larger group.
