Awilco Drilling secures £3.2m working capital loan

Offshore contractor Awilco Drilling has secured a multi-million pound short-term shareholder loan to fund its operations.

Structured as a “drawdown facility”, the loan with Awilhelmsen Offshore and QVT Family Office Fund is up to $4m (£3.2m).

An interest rate of 10% per annum has been agreed on the total amount.

Additionally, there is a 2% application fee on the loan, which will mature on July 1.

Awilco (OSLO: AWDR) said the money will be used for “general working capital purposes”.

The Aberdeenshire-based company appointed insolvency experts for one of its subsidiaries earlier this year after losing a £6.8million case to HMRC.

He had been in a long-running tax dispute with the Treasury related to the termination of a contract for the WilHunter platform in 2015.

Awilco is also embroiled in heavy legal issues with Keppel Fels over canceled orders for two new ships, Nordic Spring and Nordic Winter.

This has led to heavy arbitration with the Singapore-based shipbuilder, who are claiming a total of £516m.

Despite securing the loan, Awilco’s future remains uncertain, with the company set to lose its only active asset.

It was announced on Wednesday that dismantling company Well-Safe Solutions will buy the WilPhoenix rig from Awilco for £12.4million.

And with the WilHunter on its way to scrapping, analysts said it “could be the end of the line” for the North Sea drilling company.

Awilco said in its 2021 annual accounts that it had 86 offshore crew and 22 onshore employees, but chief executive Roddy Smith confirmed to Energy Voice that the workforce had dropped to around 20 onshore and 20 offshore. .

Although he has no foot in the market, Mr Smith says there are still options open to the Oslo-listed company.

Speaking after the announcement of the Well-Safe agreement, he said: “We will also continue to closely monitor opportunities in the area of ​​drilling contracts and well abandonment and in the event that an opportunity arises. investment opportunity is identified, we will make appropriate recommendations to shareholders at that time.”