Cash-strapped Lamprell in takeover talks

Financially troubled Lamprell has seen its shares plummet as it said it was exploring funding options and that it had received a cash takeover offer from its second-largest shareholder, Blofeld, at what it was described as a very significant discount.

The UAE-based fabricator said it was considering the possible offer from its 25% shareholder in light of its liquidity position and the funding requirements of $75m over the next two months. However, Lamprell pointed out that the offer comes at a significant discount to the company’s current share price, which fell 78% on Friday.

Lamprell said the parties have been in talks for more than two months but have not been able to strike a deal on the price or conditions of a potential offer. Under regulatory law, Blofeld has until July 22 to officially declare whether it wants to buy Lamprell.

“Any acceptable offer would need to include an interim funding solution or bridge financing,” Lamprell said in a London Stock Exchange filing.

Although things have been picking up and the company expects revenues of between $400 and $500 for this year, working capital has run out. In a separate filing, the company said it was “urgently pursuing the options available to deliver a funding solution that will resolve the group’s immediate and severe liquidity concerns.”

The options explored include asset monetisation, project-specific financing, and hybrid facilities and/or additional equity. Lamprell has also engaged its two largest shareholders, Lamprell Holdings and Blofeld, who in aggregate own close to 54%, to raise up to $150m and/or to secure some form of interim financing arrangement. Lamprell has also consulted with its other shareholders but has so far failed to reach an agreement in respect of an equity-based financing solution.

“The board has continued to explore various financing and strategic options with a number of potential providers of finance with respect to securing non-equity related sources of capital. Despite significant efforts by the company to secure this additional financing and/or execute a transaction which would provide the group with additional capital, .. to date these discussions have not resulted in new financing for the group,” the company said in a trading update.