Wood Group shareholders are being urged to back a temporary change in its borrowing limits to avoid jeopardising the acquisition of the company by its Dubai-based suitor.
The board of the Aberdeen-based company warned that exceeding its borrowing limit would breach the agreement and will hold a general meeting of shareholders later this month.
Wood’s board has unanimously recommended the reduced £206m offer from the Middle East consultancy following months of talks.
Yesterday it warned that breaching its borrowing limit would have “serious and adverse implications” for the acquisition.
The offer from Sidara, which includes a capital injection of $450 million, was made conditional on a several “highly unusual conditions”. These include the publication of Wood’s delayed 2024 accounts on or before 31 October.
In a statement it said “it has become apparent that when the company publishes its audited accounts for the financial year ended 31 December 2024, the company’s borrowings will exceed the borrowing limit.
“The board is therefore seeking shareholder approval to sanction a temporary disapplication of the Group’s borrowing limit until 31 October 2028…in order to continue to finance its operations and business.
“A breach of the borrowing limit would have serious and adverse implications for the day-to-day use of the company’s existing debt facilities and the debt facilities… relating to the recommended cash acquisition of the company by Sidara.”
“That would have a significantly adverse effect on the company’s liquidity position. It would also materially risk jeopardising the acquisition, which remains critical to the Company’s future, or any other potential transaction where shareholders would receive any value for their shares.
“It is therefore imperative that the borrowing limit is disapplied prior to publication of the audited accounts.”
It has posted to shareholders a circular including a notice of general meeting to be held at the company’s headquarters at Sir Ian Wood House, Aberdeen, at 3pm on Thursday 23 October.
It said the resolution set out in the notice of general meeting is “in the best interests of the company and of its shareholders as a whole and unanimously recommends shareholders to vote in favour of it, as each of the directors intends to do in respect of their own beneficial holdings”.
The Financial Conduct Authority is investigating the company’s affairs for the period 1 January 2023, to 7 November 2024.
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