Petrofac Limited (LSE:PFC) shares fell again as it warned it will not meet its cash targets for this year due to advance payments on several contracts not coming through.
As a result, management is looking to sell non-core assets to bolster its balance sheet and improve liquidity.
Petrofac, which fabricates oil and gas installations, said its order backlog is US$5.5 billion but it needs to provide Performance Guarantees for EPC contracts.
“Banking and surety market appetite for the provision of these guarantees in support of the contracts won by Petrofac has reduced, resulting in delays in their provision.”
René Médori, chairman, commented: “The board is fully focused on reviewing a range of strategic and financial options with the objectives of strengthening the group’s balance sheet and protecting the interests of all our stakeholders."
Petrofac added it has also appointed finance specialist Aidan de Brunner as a non-executive director.
“As the group pivots to the execution of the new contracts won in 2023, Aidan will commit a significant portion of his time to supporting the board for a limited period,” Petrofac said.
Shares dropped 8.91% to 15.49p in early morning trade.