Replacement - Banking Waivers & Contracts Update

Source: www.gulfoilandgas.com 1/2/2013, Location: Middle East

Lamprell, a leading provider of diversified engineering and contracting services to the onshore and offshore oil & gas and renewable energy industries, makes an announcement with a further update on key aspects of its trading position and certain key projects as at the year-end.

Lamprell is pleased to announce today that it has received the necessary waivers from its various lenders with respect to its existing debt facilities. As previously announced, Lamprell has been in discussions with its lending banks in order to seek waivers of certain of its banking covenants before the year-end. These discussions have been successful and culminated in a waiver of its financial covenants under the debt facilities, which were due to be tested on 31 December 2012.

The working capital position of the Company has improved significantly in recent months and we have ended the year with a net cash position in the region of US$100 million. This has resulted from higher levels of revenue and the enforcement of tighter financial controls.

As anticipated, the revenue levels will reduce in the early part of 2013, however we remain confident that, with the support of our core lenders, we will continue to have adequate working capital to finance the business and to have access to the necessary financing arrangements in order to fund certain new projects. In addition, the Company is moving forward with a wider financing of the business, which will provide a longer-term financial platform to fund its growing activities. This is expected to be completed during the first half of 2013.

With regard to the Caspian Sea jack-up project (as referred to in the Company's announcement of 19 November 2012), Lamprell has successfully launched the rig into the water in accordance with the current completion schedule. Given the challenging weather conditions in the Caspian Sea region, this milestone was of critical importance and released a significant associated milestone payment.

As announced previously, the Company has been taking various steps to mitigate the potential losses on the Windcarrier 2 project and, as a result, is confident of delivering the vessel as planned on 15 February 2013, with the naming ceremony scheduled to take place on 19 January 2013.

In another example of the strong support that the Company continues to receive from its customers, Lamprell has recently been awarded a further North Sea related project valued at approximately US$40 million and it relates to one of our stated core discipline areas in which the Group has a strong track record.

Lamprell is planning to release a more detailed trading update for the period ending 31 December 2012 in late January 2013.

John Kennedy, Chairman, Lamprell, commented: "We have made excellent progress in stabilizing the Group's financial position with the receipt of the necessary waivers in respect of the Company's financial covenants from its lenders. This reaffirms the support of our finance providers and allows us to move on to implement a wider financing of the business, which is likely to carry on well into 2013.

It is reassuring that the Group has made significant headway towards completing the existing key projects where problems had previously been highlighted. However, it is all the more pleasing to be awarded a new project within an established business sector for the Group by one of our key clients.

This year has been a difficult year for the Company but these positive developments are a clear indication that the business remains robust and is rapidly returning to normal operations. The Board will continue to take all necessary measures to expedite this process.

In light of these positive developments at the year-end, we look forward with confidence to the coming year."


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