Lamprell shares jump as oil company secures bank waivers

Lamprell shares soared to their highest in six weeks on Wednesday after the oil rig maker received banking waivers for its debt facilities.

Lamprell shares soared to their highest in six weeks on Wednesday after the oil rig maker received banking waivers for its debt facilities.

Shares jumped over 15% as the company said it had succeeded in negotiating waivers to its banking covenants which were due to be tested on December 31st.

The engineering and contracting services provider said its working capital had improved significantly in recent months, reporting a net cash position of around $100m for 2012.

Higher revenues and enforcement of tighter financial controls helped the company bounce back following five profit warnings in November which stated losses would be seven times greater than first expected. Shares lost about two thirds of their value last year.

The support from lenders is expected to help bolster the business in 2013.

"As anticipated, the revenue levels will reduce in the early part of 2013, however we remain confident that, with the support of our core lenders, we will continue to have adequate working capital to finance the business and to have access to the necessary financing arrangements in order to fund certain new projects," the company said in a statement.

"In addition, the company is moving forward with a wider financing of the business which will provide a longer-term financial platform to fund its growing activities. This is expected to be completed during the first half of 2013."

Lamprell will this year focus on developing more oil rigs including a project in the Caspian Sea. The rig has been successfully launched in the water on schedule despite challenging weather conditions in the region.

The company has also been awarded a North Sea project valued at $40m.

"This year has been a difficult year for the company but these positive developments are a clear indication that the business remains robust and is rapidly returning to normal operations, Chairman John Kennedy added.

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Here’s why you really should own at least some bitcoin
Bitcoin

Here’s why you really should own at least some bitcoin

While bitcoin is having a quiet year – at least in relative terms – its potential to become the default cash system for the internet is undiminished, …
16 Sep 2020
Central banks want politicians to take charge – but what will they do?
US Economy

Central banks want politicians to take charge – but what will they do?

The US Federal Reserve has come to the end of the road in terms of what it can do to accelerate any recovery, says John Stepek. It's over to the polit…
17 Sep 2020
IAG's share price is ready for take-off - here's how to play it
Trading

IAG's share price is ready for take-off - here's how to play it

The owner of British Airways has had a turbulent year, but is now worth a punt. Matthew Partridge explains the best way to play it.
8 Sep 2020