Petrofac has announced that its board is weighing options for the business, including the sale of non-core assets.
The company, which provides services to the oil and gas industry, said the review forms part of efforts to bolster its balance sheet, secure bank guarantees and enhance short-term liquidity.
London-listed Petrofac has also warned that it will not be able to meet the cash flow forecast it had previously given for the whole year.
The oilfield services provider attributed the delay in payments for the contracts awarded in 2023 for the reduced cash flow.
In a statement, Petrofac said: “Management has been making progress in organic actions to unwind working capital, collect receipts on ongoing and new contracts and to unlock long-outstanding commercial settlements.”
The management is also weighing its option of selling non-core assets and is actively negotiating with investors to acquire a non-controlling stake in other parts of its portfolio.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
These transactions are expected to improve the balance sheet of the company, which is exploring possible new financing solutions for all its capital classes.
Petrofac group chief executive Tareq Kawash said: “Petrofac’s underlying business is robust with material growth in our backlog from approximately $5.5bn in new awards in new and traditional energy this year.
“This demonstrates our competitive strength and long-term potential. To deliver on this, we are working hard to address short-term liquidity challenges and strengthen the financial position of the group.”
Petrofac noted that it has kept its liquidity over its financial covenant, which states that at the end of each month, the group’s liquidity (excluding funds retained in joint operations) must surpass $75m (£59.42m).
In October this year, ADNOC Gas awarded a $615m (Dh2.3bn) contract to Petrofac for engineering, procurement and construction work on the Habshan carbon capture, utilisation and storage project.