DRILLING company KCA Deutag is negotiating a restructuring package to help reduce its debt by more than £1 billion.
Reporting its half-year results, the Aberdeenshire-headquartered company said the coming months will be the “lowest for the company” since the Covid-19 outbreak began.
Joseph Elkhoury, CEO, said: “We expect the period from Q3 2020 through to the middle of 2021 to be the lowest for the company as the full impact of recent events flows through the business.”
He also added the company, based in Portlethen, was “continuing to experience an unprecedented global event.”
It is currently negotiating a restructuring package which will take its debt levels down from £1.47bn to £395m.
Meanwhile, during the second quarter, it made a three-month “standstill agreement” where lenders will not call in their loans.
The restructuring process “should complete in November”, KCA said, and “put the company in a much stronger financial position.”.
An investor report stated the move would improve liquidity, giving the firm $117m (£91m) of “day-one cash”.
KCA Deutag’s pre-tax losses for the first half of the year were £94.1m, comparable to £88.1m losses in H1 2019.
The company’s preferred measure of EBITDA (earnings before interest, tax, depreciation and amortisation) was £105.2, down from £110.2m.
Revenues were £489m, reduced from £555.6m in the same period last year.
Mr Elkhoury said: “We have now successfully signed a binding lock-up agreement that maps out in detail our proposed financial restructuring.
“This process should complete in November 2020 and will put the company in a much stronger financial position.
“We are pleased with this outcome and we look forward to working with our new shareholders and board members.”
