Shares in energy infrastructure services provider Petrofac (LON: PFC) have risen 26% to 21.44p on the back of news that it is considering how to strengthen the balance sheet. It requires short-term liquidity, while it tries to satisfy the orders it has won. Anticipated cash inflows are not likely to happen this year.
Aidan de Brunner has been appointed as a non-executive director and he will focus on engaging with finance providers and investors as part of a review of strategic and financial options.
There have been $5.5bn in new awards this year, but that has put a strain on the balance sheet. The financial covenant that requires more than $75m of liquidity at the end of each month has not been broken.
Management is focusing on collecting debtors and unwinding working capital. There have been delays in securing advanced payment guarantees.
The sale of non-core assets is one way of raising cash. Financial investors may take a non-controlling stake in some parts of the business.
The share price has fallen by more than two-thirds so far this year and it more than halved last month. There will be a pre-close trading statement on 20 December.