Friday 29 May 2020

Gulf Marine Services PLC ("GMS" or the "Company") announces that it has entered into a Framework Agreement (the "Agreement") with Zakher Marine International ("ZMI"), a leading privately-owned operator of self-propelled SESVs in the Middle East. We have agreed to identify mutually beneficial cost-saving opportunities and improve our operational availability for the benefit of our customers using the combined scale of both self-propelled SESV fleets.

The Agreement lays out the principle areas of potential co-operation, comprising:

· Procurement;

· Logistics;

· Maintenance, Classification and Repair; and

· Employment and Training of Offshore Crew.

GMS and ZMI have agreed to establish joint teams and protocols to identify ways to pool resources, combine functions, and leverage combined purchasing power in order to reduce costs.

Both companies operate a similar number of modern exclusively self-propelled SESV vessels, sharing many key components, allowing for multiple opportunities to leverage the combined scale in key areas to reduce third-party spend, while maintaining operational and service excellence.

Our intention is to pass a portion of the savings on to our customers whilst also strengthening our margins. This will increase our ability to compete more effectively and will underpin each business in continuing to meet the needs of all stakeholders in what remains a highly competitive marketplace. Most of the cost benefits are expected to flow through in 2021 and beyond.

GMS and ZMI will continue to operate and compete as independent commercial entities in accordance with applicable laws, regulations and their respective contractual obligations.

Tim Summers, Executive Chairman, said

"GMS has made substantial progress on cost management over the last twelve months. Accretive gains will continue, but this strategic move offers genuinely substantive progress. Under this Agreement we will work with ZMI to explore leveraging the combined scale of our respective supply chains, in order to lower costs and maintain higher operational availability and uptime for our customers."

Zakher Marine International (ZMI) are a logical choice of partner for GMS as they have the only exclusively self-propelled SESV fleet that is comparable to GMS in age, size and specification. ZMI operates in all of our key markets in the Middle East, and is headquartered, as we are, in Abu Dhabi.