Lamprell shares tanked on Friday as it said it was exploring funding options and that it had received a bid approach from major shareholder Blofeld at a “very significant” discount.
Lamprell said that Blofeld, which owns a 25% stake in Lamprell, has made a non-binding indicative cash offer for the rest of the company.
“The board is considering the possible offer in light of the group’s liquidity position and the company’s funding requirements of $75m over the next two months,” it said. “Blofeld’s proposal in respect of the possible offer is at a very significant discount to the prevailing share price and any acceptable offer would need to include an interim funding solution or bridge financing.”
Lamprell said the parties have been in talks for more than two months but have not reached agreement on the price or conditions of a potential offer.
In a separate statement, the company said it was “urgently pursuing” options to deliver a funding solution that will resolve its “immediate and severe liquidity concerns”.
The options being explored include asset monetisation, project-specific financing, and hybrid facilities and/or additional equity. Lamprell also said it has been engaged in talks with its two largest shareholders – Lamprell Holdings Limited and Blofeld – who in aggregate own around 53.98%, as it seeks support for a potential equity fundraise of up to $150m and/or some form of interim financing arrangement.
The group has also consulted with its other institutional shareholders but so far have been unable to reach an agreement in respect of an equity-based financing solution.
Lamprell said its current trading performance continues to be affected by the delivery of legacy, low margin projects and insufficient revenue levels as it emerges from a prolonged period of low market activity due to the low energy prices and more latterly, the impact of Covid-19 .
“New awards for Lamprell in all of the group’s end markets over the past two years were below expectations, impacted by Covid-19 and due in part to client concerns regarding the liquidity constraints the group faces and balance sheet strength in order to support large scale projects,” it said.
As a result of the recent reservation agreement and anticipated contract awards, it expects 2022 revenue to be between $400m and $500m, with $340m secured for 2022.
At 0825 BST, the shares were down 76% at 5.50p.
