Petrofac UK signss binding agreement with its creditors regarding financial restructuring

Petrofac, a provider of oilfield services, announced on Sunday it had reached a binding agreement on terms for a restructuring with its key financial creditors.

The company stated that the plan will include $325 million of new funding as well as the conversion of $772 million of existing debt to equity.

In a recent statement, Group Chief Executive Tareq Kwash stated that "we have made progress in closing our legacy contract portfolio, and our new projects are moving forward well. We have a refreshed strategic focus on our strengths with improved bidding discipline, project governance, and a refreshed strategy focusing on our core competencies."

In September, Petrofac and some of its major stakeholders reached an agreement in principle for a financial restructure that included raising money through equity financing as well as converting most of the debt into equity.

In September, the London-listed company reported larger half-yearly losses due to difficulties closing legacy contracts at its largest unit. The net loss of the company increased to $208 millions in the six-month period ended June 30, up from $141million in the same time last year.

In recent months, after a surge in orders in 2022 due to high oil price, the company has struggled with a series of profit warnings relating to legacy contracts and payments delays at its largest Division, Engineering & Construction. The company previously stated that it was in talks to sell non-core assets. Pretish M. J. in Bengaluru, Leslie Adler & Lisa Shumaker edited the story.

(source: Reuters)