UAE’s GEM working with Perella on $350m debt restructuring

Gulf Energy Maritime (GEM) is working with Perella Weinberg Partners to try to restructure its roughly $350m in debt as it seeks to stave off a default, sources familiar with the matter said.

The Dubai-based product and chemical tanker company, which counts Emirates National Oil Company (ENOC), Mubadala Investment Co and Oman Oil Co as its three main shareholders, has been asking its creditor banks to amend and extend its debt, the sources said.

GEM, which has struggled with depressed demand in the tanker market, is currently in technical default as the estimated $270m value of its assets, in the form of its fleet, has dipped below that of its debt, two of the sources said.

The firm is now seeking to reach a breakthrough in negotiations with creditors to help avoid the possibility of an actual default, which could happen as early as this month, the two sources said.

Formed in 2004, GEM has a fleet of 19 trading ships, according to its website. GEM and Perella Weinberg Partners did not immediately respond to requests for comment.

One of the challenges facing GEM is that some of its creditors are asking for guarantees on their debt or they will seek to take over the assets, one of the sources said.

Another complication is that one of the lenders, Standard Chartered, is potentially in a better position than the others as its exposure is collateralised, meaning it is protected in case of a default, two of the sources said.

As a result, it did not share the same thinking as other creditors on how to resolve the negotiations, the two sources said.

Standard Chartered did not immediately respond to a request for comment.

Another scenario that could materialise included banks taking a haircut on their debt, said one of the sources.

Dubai government-owned ENOC holds 35.6 per cent of the company, Abu Dhabi state fund Mubadala owns 30.5 per cent, and Oman Oil, owned by Oman’s government, holds 30.4 per cent, according to Refinitiv data.

French aerospace and defence group Thales holds 3.3 per cent, the data shows.