Petrofac Limited (LSE:PFC) updated on its ongoing strategic review and turnaround with the company, currently valued in the market at around £120 million, telling investors that it is in active talks with its lenders and potential ‘capital providers’.
It follows December’s update, in which the offshore engineer and oil services firm said it intended to fortify its balance sheet and enhance its liquidity.
The company, today, noted that the active negotiations were ongoing and so is its strategic review that intends to secure a solid foundation to satisfy its backlog of work that’s estimated to be worth $8 billion.
Petrofac added that it has successfully secured performance guarantees for its material contracts, including its first contract under the TenneT framework agreement and the ADNOC Habshan contract.
The company said these agreements are critical for the company as it continues to negotiate further guarantees.
Efforts to resolve legacy issues and optimize working capital are also underway, it added, whilst it also said that it's making “good progress” unwinding historical working capital.
Liquidity is being maintained above Petrofac’s financial covenant, the company added in the statement which comes ahead of April’s release of financial results for 2023.
Tareq Kawash, Petrofac chief executive, commented: “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.”