Petrofac Limited Provides Strategic and Financial Update

Petrofac Limited has offered an update regarding its ongoing review of strategic and financial options, initially announced on 4 December 2023 and followed by an update on 20 December 2023. The company aims to substantially improve its balance sheet, enhance short-term liquidity, and secure additional bank guarantees. Petrofac is engaged in active discussions with stakeholders, including its lending group of bondholders and banks, as well as other potential capital sources. Additionally, the company is proceeding with efforts to sell non-core assets.

The combined measures aim to manage the Group’s payment obligations and support the provision of guarantees, thereby establishing a capital structure and liquidity level that aligns with the company's backlog and future business prospects. Petrofac also highlighted progress in obtaining performance guarantees for the TenneT framework agreement and the ADNOC Habshan contract, vital for near-term cash flow through advance payments and reduced collateral requirements.

Negotiations are ongoing with numerous credit providers to acquire necessary guarantees for recently awarded contracts. Petrofac is also in discussions with clients regarding the scale and timing of performance guarantees. The company is actively working to finalize these discussions promptly and will make further announcements as necessary.

Operationally, Petrofac has seen significant progress, with new contracts in 2023 increasing its backlog to over US$8 billion. The company remains focused on completing its legacy projects and resolving historical working capital issues, maintaining liquidity above its financial covenants. Detailed operational and financial updates are expected in the Full Year Results announcement in April.

Group Chief Executive, Tareq Kawash, expressed confidence in the company's direction and the strength of Petrofac's market proposition, underlined by a substantial order book. He emphasized ongoing efforts to fortify the Group's financial standing and expressed gratitude for the support from various stakeholders.