Petrofac hires Moelis and Teneo to advise financial restructuring

The board of London-listed energy services company Petrofac has selected Moelis & Company and Teneo as advisors to its major restructuring overhaul.

Petrofac, a company that offers services related with oil and other energy infrastructure, recently announced that it is exploring the sale of non-core assets in order to address a reduction in cash flow.

According to Petrofac’s chief executive officer Tareq Kawash, the board is “examining a range of strategic and financial options with the objective of materially strengthening the company’s balance sheet, securing bank guarantees and improving short-term liquidity.”

“A key aim of this review is to protect the interests of Petrofac’s shareholders, creditors and employees while the Group continues its focus on safe and effective delivery for its clients,” Kawash continued.

Besides shedding non-core assets, the company is also working to free up more working capital and move forward with existing commercial settlements.

Supporting the process are bankers from Moelis & Company and financial restructuring experts from Teneo. The two firms are teaming up to assess financial restructuring options, and advise the board on steps that can be taken on the immediate and longer term.

Moelis & Company is an investment bank and corporate finance advisor headquartered in New York. Fellow US-headquartered Teneo is a global business advisory firm. The firm’s UK restructuring business was has much of its roots at Deloitte.

Petrofac’s move comes at a time of distress. The company recently announced that it would not be able to meet the cash flow forecast it previously set for this year. This reduced cash flow issue also caused delays in payments for contracts awarded in 2023, though it is not the first time.

Kawash said that despite the challenges, “Petrofac’s underlying business is robust with material growth in our backlog from approximately $5.5 billion in new awards in new and traditional energy this year.”

“This demonstrates our competitive strength and long-term potential. To deliver on this, we are working hard to address short-term liquidity challenges and strengthen the financial position of the Group. I am grateful for the continued efforts of our people, and the support of our clients and other stakeholders, as we work to deliver a positive future for Petrofac.”