Blofeld, potential offer from Al Gihaz Eye, ready for cash-strapped Lamprell

Cash-strapped offshore construction company Lamprell said on Tuesday it had received a non-binding combined indicative cash offer from Blofeld and Al Gihaz to acquire all remaining shares of Lamprell. The Blofelds and Al Gihaz hold a combined 44.24% stake in Lamprell.

“The joint bidders are working as quickly as possible to present the possible offer for the full issued and to be issued share capital of Lamprell at a price of 9 pence per ordinary share, which also includes a proposal for a guaranteed bridge loan with a peak amount total of $145 million,” Lamprell said.

“Lamprell’s board of directors has carefully assessed the potential offer with its financial adviser, Investec Bank plc, in relation to the company’s current liquidity needs, as set out in the company’s June 24 announcement.” , Lamprell said.

“The board has concluded that if a binding offer were made on the same financial terms as the prospective offer, it would be prepared to recommend it to Lamprell shareholders, subject to the agreement of other customary terms and conditions and subject to the proposed bridging offer agreement is ready,” Lamprell said on Tuesday.

Cash required for the construction of an offshore drilling rig

Lamprell, which builds offshore facilities for the international offshore oil and gas and offshore wind industries, said last month that operationally the company continued to deliver to customers and had a pipeline active in new business opportunities.

However, he added that the council was urgently researching the options available to provide a funding solution that would solve the problem. the group’s immediate and serious liquidity problems, with options including the monetization of assets, project-specific financing, hybrid facilities and/or additional equity, with a view to finalizing these options in Q2 2022, in line with the company’s working capital requirement.

The company, which had $58.4 million in cash (gross) on June 23, is building two jack-up rigs for its client IMI JV and investing in a yard upgrade program in Dubai to bolster its offering. of renewable energy capacity.

Delivery of Rig 1 is expected by the end of 2022 and delivery of the second rig (“Rig 2”) is expected to take place in the first quarter of 2023.

In its update last month, Lamprell said, “Upon delivery of Rig 1, the company expects to receive its final milestone payment under the respective contract. However, the company has significant working capital requirements to allow it to complete Rig 1.

“There is a similar working capital profile with respect to the completion and delivery of Rig 2. Current milestone payments the group is expected to receive include $26.4 million in October 2022, $44 million in December 2022 and $44 million in March 2023. A major working capital requirement is to pay for equipment provided by a Tier 1 service company for use on Platforms 1 and 2. The total amount of this payment is $59 millionof which $51 million is due to this key supplier in July 2022, with the balance payable in December 2022 (deferrable in return for an additional fee).

$55 million for yard improvements

As for the expansion of its Hamriyah yard, Lamprell said last month that the investment includes the construction of a state-of-the-art renewable energy mass production line, through which we will be able to build shaft components, transition pieces and monopiles.

“The company believes that this major investment project amounting to approximately $55 million in investments over the next 9 months is essential to achieving the Group’s growth strategy in renewable energies. The project has the potential to double Lamprell’s annual renewable energy revenue capacity from approximately $400-600 million to approximately $800-1,200 million while reducing unit production costs and significantly improving contribution to the gross margin of more than 2.5 times on offshore wind foundation projects,” Lamprell said. at the time.

“The group is now facing urgent and severe liquidity constraints, and requires an immediate financing solution or bridge financing to a financing solution to meet immediate financing obligations of $75 million in June/July 2022[…],” Lamprell said on June 24. In addition to immediate working capital needs, the $75 million would cover the repayment of the $26.4 million loan facility.

The company also stated that it has medium-term capital needs (until December 31, 2023) of $164 millionincluding $55 million of IMI JV contributions, $55 million for capital expenditure of renewable production lines, $38 million for end-of-service benefits (equivalent to pension rights in the UAE) and $16 million for dollars for maintenance capital expenditure.

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