Strategic Plan

MMA Offshore has been pursuing a clear strategic plan to respond to the downturn in the offshore vessel market over the past three years.

As outlined in the Pareto Securities Report, “Analysis of Certain Halom assertions”, dated 27 October 2017:

  • The Company has pursued a strategy of shrinking its operational footprint to mitigate unnecessary cash burn in response to challenging market conditions, including the sale of certain assets and downsizing of ship yard facilities.
  • This has allowed a debt reduction of 30% since financial year end 2014, which has facilitated continued bank support.
  • It has segregated its fleet into core and non-core – allowing orderly disposal of non-core vessels and preservation of the Australian capable fleet.
  • The remaining fleet is comparatively young (the age of its core fleet is approximately 5 years) and MMA is well placed for a market recovery.
  • MMA has managed to gain some market share in the Australian market, despite decreased project activity and related vessel demand.
  • The Company has executed a successful partnership strategy, focusing on the Middle East and the subsea space, which has had a positive impact on vessel utilisation.
  • MMA has reduced its cost base, while at the same time preserving operational competency, which will be key to achieving profitable growth as the market recovery continues.

Halom's Proposal

Halom Investments Pte Ltd (Halom), a substantial shareholder of MMA, has requisitioned resolutions seeking to remove Managing Director, Jeff Weber and Chairman, Tony Howarth from the Board of Directors at MMA’s upcoming AGM, replacing them with two directors nominated by Halom, Mr Jeffrey Mews and Mr Ajaib Hari Dass.

The Board is concerned that, through its proposed changes to the composition of the Board and its plan to appoint a new CEO, Halom would obtain disproportionate representation on the MMA Board (relative to its shareholding), which could position it to potentially seek to exert disproportionate influence over the strategic direction of the Company. Further, such changes could destabilise the strong relationships the Company currently enjoys with its clients and its lenders which are crucial to the successful continuation of the recovery strategy in place.

As noted in an article in The West Australian newspaper, MMA had previously received a recapitalisation proposal from Halom (through its advisors Moelis & Company). The recapitalisation proposal was not supported by the Board on the basis that it was considered to not be in the best interests of the Company and all of its shareholders at the time.

MMA is actively considering the structure and timing of a potential equity raising, coupled with amended and extended debt facilities, to ensure the best possible outcome for ALL shareholders.