Lamprell encouraged by client demand, announces rights issue

Oil engineering group Lamprell has started the year well and is encouraged by the on-going dialogue with a number of prospective clients for new projects.It was also upbeat about the recent $390m contract win with Ensco, management told investors in a trading update for the year to May 15th. New projects running on schedule and on budgetOver the latest reporting period the outfit successfully delivered its 15th new build jack-up drilling rig "Qarnin" to National Drilling Company and the 13,000 plus tonne production, utilities and quarters (PUQ) deck to Nexen's Golden Eagle Area Development in the North Sea.Three further new build jackup rigs, one liftboat and two offshore platforms, as well as the largest rig conversion and refurbishment project in Lamprell's history, are scheduled to be delivered in 2014. They were all proceeding according to plan and on budget. Rights issue: Setting the optimal stage for future growth In parallel, the firm has announced that it will pursue a rights issue with the aim of raising gross proceeds of £71.6m. The company explained that the proceeds would be directed at providing a stronger platform from which to refinance its existing debt with the aim of optimising its long-term capital structure and supporting the company's growth. More specifically, of the above amount $60m is to go towards a yard investment with the remainder to be used to help repay in full the borrowings under term loan facility B.Existing funded facilities will be replaced with a $350m facility, which will sit alongside any continuing bilateral unfunded facilities. Additionally, its lending banks will arrange a further $250m bonding facility, a part of which is committed.That may be used for project bonding requirements under new contract awards.The funding arrangement is conditional on the completion of the rights issue. AB