The share price of Mermaid Marine has performed like a stunned mullet for much of the past year.The company runs a fleet of 15 vessels and three marine supply bases at Broome, Dampier and Darwin. When Mermaid went public at 50c a share in June 1999 it was seen as an inexpensive warrant on the growth of the North West Shelf. Initially the stock bobbed up to 75c, but it was not long before it struck rough seas.The big oil and gas players in the Darwin triangle cut their spending as the oil price visited abysmal lows. They continued to tighten their belts while the price soared, because a chorus of experts predicted the surge could not last.Mermaid began to flounder and the share price sank to a low of 20c. It became clear that the company needed an injection of management and cash. Happily, it is about to get both.Mark Bradley, an engineer who has more than a quarter of a century experience in the offshore oil and gas industry, is to come on board as CEO.Arriving on the same tender is Clough Engineering, which will be putting up $3 million to buy 10 million new shares in Mermaid at 30c each. Bradley, who directed Clough’s offshore operations for a decade, is signing a cheque for $2 million to get 6.7 million shares at the same price.Part of the issue has to be approved at the annual general meeting on November 8, after which Clough and Bradley will emerge with 16.8 per cent and 11 per cent respectively of the enlarged capital.The deal looks very positive for Mermaid. It gets the engineering expertise of Clough, which was recently named as the local partner in a proposed $600 million gas-to-liquids project in the Burrup peninsular, and it is strategically placed to win more contracts in the area. It also collects $5 million cash, which is needed pending a turn in the tide.That money was supposed to have come from the proceeds of 6.5 million free options due to be exercised at 75c on November 30. The ordinary shares have perked up to 44c, but only the terminally optimistic would expect the options to be above water by then. However, Mermaid wants to do the right thing by the holders. The plan is to offer them fresh options at one cent a time on the same conversion terms.The $5 million extra kick in the kitty will be big a help in developing Mermaid’s Dampier port facilities. The total cost has been put at $15 million. The company’s net debt already stands at $9.5 million.The North West Shelf is soon expected to become a hive of activity. It will get another lift from the now almost certain multi-billion dollar expansion of the LNG gas industry.
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