Shares in troubled oil-rig maker Lamprell jumped 20pc on Wednesday after it announced that its lenders had agreed to waive key banking covenants and that it had won a $40m North Sea contract.
The company, which also provides engineering services in the renewable energy sector, saw its shares tumble 61pc over the course of 2012 as it stunned the market with five profit warnings related to project delays and cost overruns.
Lamprell is currently expected to make a loss for the year of $105m (£64.4m), compared with the $117m profit that had been predicted before its first profit warning As a result it was forced to seek waivers for certain conditions attached to its debt, and had been in talks with lenders ahead of key covenants being tested on December 31.
“These discussions have been successful,” Lamprell said.
Its cash position had improved significantly in recent months, to about $100m, and it said it was confident that it would have enough funds available for certain new projects.
It is making progress with plans for a wider long-term financing arrangement, which it expected to conclude in the first half of 2013.
Lamprell also said it had won a new $40m contract in one of its core areas in the North Sea, which it said showed “the strong support that the company continues to receive from its customers”.
Elsewhere, a project for a jack-up rig in the Caspian Sea, which had been hit by problems including poor labour productivity, had been launched into the water despite “challenging weather conditions”.
And a wind farm installation vessel which had been hit by cost overruns was also on track for delivery in line with its revised schedule. John Kennedy, chairman, said: “These positive developments are a clear indication the business remains robust and is rapidly returning to normal operations”.
Analysts at Arden upgraded the shares to “neutral” on the back of the “encouraging” update.
They said the covenant waiver “buys the company time” and welcomed the new contract win, which showed customers were “willing to stick with Lamprell despite its recent travails”.
Lamprell shares rose 19¼ to 113¼p.
telegraph.co.uk
The company, which also provides engineering services in the renewable energy sector, saw its shares tumble 61pc over the course of 2012 as it stunned the market with five profit warnings related to project delays and cost overruns.
Lamprell is currently expected to make a loss for the year of $105m (£64.4m), compared with the $117m profit that had been predicted before its first profit warning As a result it was forced to seek waivers for certain conditions attached to its debt, and had been in talks with lenders ahead of key covenants being tested on December 31.
“These discussions have been successful,” Lamprell said.
Its cash position had improved significantly in recent months, to about $100m, and it said it was confident that it would have enough funds available for certain new projects.
It is making progress with plans for a wider long-term financing arrangement, which it expected to conclude in the first half of 2013.
Lamprell also said it had won a new $40m contract in one of its core areas in the North Sea, which it said showed “the strong support that the company continues to receive from its customers”.
Elsewhere, a project for a jack-up rig in the Caspian Sea, which had been hit by problems including poor labour productivity, had been launched into the water despite “challenging weather conditions”.
And a wind farm installation vessel which had been hit by cost overruns was also on track for delivery in line with its revised schedule. John Kennedy, chairman, said: “These positive developments are a clear indication the business remains robust and is rapidly returning to normal operations”.
Analysts at Arden upgraded the shares to “neutral” on the back of the “encouraging” update.
They said the covenant waiver “buys the company time” and welcomed the new contract win, which showed customers were “willing to stick with Lamprell despite its recent travails”.
Lamprell shares rose 19¼ to 113¼p.
telegraph.co.uk
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