StockMarketWire.com - Oil and gas services company Lamprell warned on its future amid an urgent need for additional capital to strengthen its balance sheet.

'Against this backdrop and with the current liquidity challenges facing the business, a material uncertainty exists in respect of the company's going concern position,' the company said.

'To fulfil its near-term working capital needs and to then meet its medium-term strategic objectives, the group must complete a new funding arrangement of USD 120-to-150 million by the end of Q3 2021,' it added.

The company said it was in 'advanced stages' of negotiation with certain relationship banks to secure project finance facilities, which will be secured by the proceeds of specifically identified projects, of up to USD 90 million, backed by export credit agency support.

Failure to secure the funding arrangement will force the group to tap the equity market for for the full amount of $120-to-$150 million, but should this option fail then the 'group is unlikely to be able to maintain sufficient liquidity in order to continue trading,' the company warned.

The dire update came alongside annual results that showed a fall in annual losses and a rise in revenue.

For the year ended 31 December 2020, pre-tax losses narrowed to USD 53.4 million from USD 183.5 million year-on-year as revenue rose 30% to USD 338.6 million.

The backlog of USD 522.0 million at year-end, was up from 470.1 million in 2019.

Story provided by StockMarketWire.com