Petrofac's creditor talks continue as firm looks to strengthen balance sheet

Petrofac has said that work to bolster its balance sheet is ongoing as it continues to have active discussions with stakeholders and lenders for performance guarantees in order to fund ongoing work.

The oilfield services group announced back in December that it was undertaking a review, the object of which is to "materially strengthen the company’s balance sheet, improve short-term liquidity and secure bank guarantees".

Petrofac said that discussions with bondholders, lending banks and other capital providers revolve around ensuring the company has appropriate capital structure and liquidity to support its backlog of work, which currently stands at more than $8bn.

"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," the company said.

Talks are ongoing with credit providers to obtain guarantees for recently awarded contracts, and further announcements will be made as appropriate. Meanwhile, the company is continuing to explore the potential sale of non-core assets.

"Petrofac continues to deliver well for our clients, evidenced by the growth in our backlog, on which very good progress is being made," said chief executive Tareq Kawash.

"Our significant order book, which now stands at over $8bn, 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."