Press
Release
5 March
2024
Update on review
of strategic and financial options
Petrofac today provides an update
with respect to its review of strategic and financial
options, further to its
announcements on 4 December 2023 and 20 December 2023. This review,
which is ongoing, has the objective of materially strengthening the
Company’s balance sheet, improving short-term liquidity and
securing bank guarantees.
Active discussions are progressing
with Petrofac’s stakeholders including its lending group,
comprising both bondholders and lending banks, and other capital
providers. Furthermore, as announced on 4 December, Petrofac is
making progress in exploring the sale of non-core
assets.
Taken together, these actions are
being undertaken with the aim of managing the Group’s payment
obligations, supporting the provision of guarantees and ensuring
that Petrofac has the appropriate capital structure and liquidity
to support the strength of its backlog and future business
prospects.
The provision of performance
guarantees and advanced payment guarantees remains a key driver of
near term cashflow for the Company, by enabling the receipts of
advance payments, releasing cash collateral and reducing future
collateral requirements. As previously announced, Petrofac was
successful in obtaining the performance guarantees for the first
contract award under the TenneT framework agreement and for the
ADNOC Habshan contract.
Negotiations continue with a broad
set of credit providers with a view to obtaining the guarantees
contractually required for other recently awarded contracts. In
addition, discussions remain ongoing with clients around the
required scale and timing of performance guarantees.
The Company is working to conclude
discussions with these counterparties as swiftly as possible.
Further announcements will be made as appropriate.
Operationally, the Group continues
to make good progress with contracts awarded in 2023, which
increased the backlog of the Group to over US$8 billion. It is also
making good progress in closing out its legacy portfolio and
unwinding historical working capital. It has continued to maintain
liquidity above its financial covenant and will provide further
details on its operational and financial performance within the
Full Year Results announcement in April.
Commenting, Group Chief Executive,
Tareq Kawash said:
“Petrofac continues to deliver well
for our clients, evidenced by the growth in our backlog, on which
very good progress is being made. Our significant order book, which
now stands at over US$8 billion, demonstrates the strength of our
proposition to customers and Petrofac’s long-term potential. To
deliver on this opportunity and position Petrofac for the future,
we are focused on plans to materially strengthen the financial
position of the Group. This work continues apace and I am grateful
for the continued efforts of our people, and the support of our
clients and other stakeholders.”
ENDS
For further
information contact:
Petrofac
Limited
+44 (0) 207 811
4900
James Boothroyd, Head of Investor
Relations
James.boothroyd@petrofac.com
Sophie Reid, Group Director of
Communications
Sophie.reid@petrofac.com
Teneo (for
Petrofac):
+44 (0) 207 353 4200
petrofac@teneo.com
NOTES TO
EDITORS
Petrofac
Petrofac is a leading international
service provider to the energy industry, with a diverse client
portfolio including many of the world’s leading energy
companies.
Petrofac designs, builds, manages
and maintains oil, gas, refining, petrochemicals and renewable
energy infrastructure. Our purpose is to enable our clients to meet
the world’s evolving energy needs. Our four values - driven, agile,
respectful and open - are at the heart of everything we
do.
Petrofac’s core markets are in the
Middle East and North Africa (MENA) region and the UK North Sea,
where we have built a long and successful track record of safe,
reliable and innovative execution, underpinned by a cost effective
and local delivery model with a strong focus on in-country value.
We operate in several other significant markets, including India,
South East Asia and the United States. We have 8,500 employees
based across 31 offices globally.
Petrofac is quoted on the London
Stock Exchange (symbol: PFC).
For additional information, please
refer to the Petrofac website at www.petrofac.com