(Alliance News) - Lamprell PLC on Friday said it received a "discounted" cash takeover offer from a large shareholder and tat it was in discussions over a potential equity fundraise of USD150 million.
Lamprell said its net cash has decreased to USD8.4 million as of June 23, from USD52.9 million at the end of 2021.
Lamprell shares fell 77% to 5.19 pence each on Friday morning and down 90% over the past 12 months, giving it a market capitalisation of GBP22.5 million.
The company's shares closed on Thursday in London at 22.10 pence, giving the company a market capitalisation of just above GBP90 million.
The United Arab Emirates-based provider of oil field services provider noted the takeover offer from 25% shareholder Blofeld Investment Management, which comes at a deep discount to its current share price. Under regulatory law, Blofeld has until July 22 at 1700 BST to officially declare if it wants to buy - or not buy - Lamprell.
Lamprell said it was considering the possible offer in light of its liquidity position and the funding requirements of USD75 million over the next two months.
The firm said Blofeld's proposal is at a "very significant discount" to its current share price and any acceptable offer would need to include an interim funding solution or bridge financing. Further, the pair have been in discussions for more than two months but have not reached agreement on the price.
The oil field services provider said the board has been in "frequent discussions" over the last three months with its two largest shareholders, Lamprell Holdings Ltd and Blofeld, over a potential equity fundraise of up to USD150 million.
In addition, Lamprell said it ended talks, announced in March, for the sale of oil & gas business, which had yielded little progress.
"It became apparent during the course of negotiations that such a disposal on the terms proposed, would be highly problematic to execute and would ultimately leave the group without a viable business going forward. Furthermore, the board believes the proposal significantly undervalued the assets of the business," Lamprell explained.
Turning to current trading, Lamprell said its 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 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 explained.
Lamprell expects 2022 revenue to be in the range of USD400 million to USD500 million, with USD340 million secured for 2022. It also said revenue recognition will be heavily weighted towards the second half of the year.
By Tom Budszus; tombudszus@alliancenews.com
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