Energy services company Petrofac said on Monday it was in talks to sell some non-core assets as it works to improve its cash flow.
The London-listed firm said in a market update it had experienced delays in collecting advance payments on the new contracts it secured in 2023, sending its share price rolling downhill.
“While the group has made progress in reaching contractual settlements and unwinding working capital, given delays in securing advance payment guarantees, it no longer expects to receive these advances before the year-end,” Petrofac said in a statement, adding that it no longer expects to meet the guidance previously provided for full year cash flow.
Petrofac has been struggling with payment delays and cost overruns at its engineering and construction arm which reported a $165m loss for the first six months this year.
The company said it was also exploring potential new financial options across all its classes of capital, and was actively engaged in discussions with investors to take a non-controlling position in certain other components of its business portfolio.
The move is designed to strengthen its balance sheet, secure bank guarantees and improve short-term liquidity, the company said.
Aidan de Brunner has joined the company as a non-executive director to drive engagement with finance providers, investors and other stakeholders in review of strategic and financial options.
“The board is fully focused on reviewing a range of strategic and financial options with the objectives of strengthening the Group’s balance sheet and protecting the interests of all our stakeholders. The appointment of Aidan de Brunner reinforces the skills and experience of the board in support of these efforts,” said Petrofac chairman René Médori.
