Norwegian geophysical services company EMGS has launched a refinancing proposal as it requires additional funding injection to keep the company running.
An independent board of directors of EMGS, which did not include board members representing the major shareholders has, in cooperation with the company’s three largest shareholders, developed a comprehensive refinancing proposal.
The refinancing consists of a rights issue with gross proceeds of up to USD 12.5 million, whereof USD 10.0 million is underwritten, and issuance of a new, fully underwritten convertible bond loan with a total nominal amount of up to USD 32.5 million.
The underwriting will be regulated by way of underwriting agreements, with fully termed underwriting agreements expected to be executed on or about March 5, 2018.
The rights issue will provide the company with financing for general corporate purposes.
The net proceeds from the bond issue will be used to refinance the company’s existing bond issue.
The rights issue and the bond issue are subject to approval from the company’s general meeting to be held on March 23, 2018.
To remind, EMGS booked losses of USD 21.5 million in 2017, up from a loss of $52.1 million in 2016.
The company secured backlog of $3 million at the end of the Q4 2017, compared with a backlog of $1 million at the end of 2016.