Insolvency D-day looms for Kvaerner
Anglo-Dutch engineering group Kvaerner today said it faces insolvency unless it finds a solution to critical financing problems by Monday next week.
In a statement issued today, the company, which is listed on the Oslo and London stock exchanges, said: ‘If Kvaerner is unable to find a solution before Monday 29 October, a critical liquidity situation will develop for the group.’
The company said it was working on a number of initiatives, including talks with its majority shareholder, to advance the sale of its hydrocarbons and process technology businesses, which will have an immediate positive impact on liquidity.
Yesterday, the company said there were ‘uncertainties attached to the current cash forecasts’ of the group despite two short-term loans taken out in September and October.
According to a company spokesman, Kvaerner’s current difficulties can be traced back to financing problems, which were affected by the current economic climate.
He told AccountancyAge.com: ‘We were about to re-negotiate our long-term financing and until 11 September it looked like it was going to be positive. But after the 11th the credit committee changed its position.’
He added they have also seen a slowdown in areas connected with manufacturing, particularly in the US metals sector, but that has not really affected them because their business is not focused on this sector.
Kvaerner employs 35,000 people in almost 35 countries and has annual revenues of over $6bn (Pounds 4.2bn). It operates in two core business areas: engineering and construction, and oil & gas. The company is registered in Norway, but has its headquarters in London.
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