Petrofac extends banking facilities, says net debt will be better than expected

With the "unanimous support" of its lenders, Petrofac has secured a $610m extension of its existing revolving credit facility to 2 June 2022, with an option to extend for a further six months, and a $90m extension of its bilateral term facility with Abu Dhabi Commercial Bank to 1 April 2022.

The increase in margin on these facilities reflects market conditions and remains competitive, the company said.

Existing financial covenants remain unchanged and will be tested on a quarterly basis. In line with Petrofac’s liquidity policy, the extended revolving credit facility includes a minimum liquidity covenant of $100m.

Petrofac said the revised facilities of $700m represent a reduction in facility size of $450m, "in line with business requirements and reflecting the group's transition to a capital light business model". Both facilities were due to be repaid or prepaid on or before 2 June.

"The extension of these facilities, together with the issue of £300m in commercial paper under the Covid Corporate Financing Facility in February 2021, preserve the group's strong liquidity position which was $1.3bn at 31 March," it said.

The group now expects to report net debt of $116m as at 31 December 2020, better than expectations, and said it continues to target eliminating net debt "as market conditions and contract awards recover".

At 1300 BST, the shares were up 8.6% at 105.70p.