Kvaerner attempts speedy sell-off to avoid going bust

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The Independent Online

The ailing Anglo-Norwegian engineering group Kvaerner has asked its largest shareholder, Yukos, to speed up its $100m (£70m) purchase of two of its units in an attempt to stave off bankruptcy.

Kvaerner has warned that it is about to run out of cash, putting thousands of British jobs at risk, unless it could plug a 500m Norwegian kroner (£40m) shortfall by the weekend.

Yukos, the Russian oil producer that has recently built up its stake in Kvaerner from 12 to 22 per cent, has agreed to buy Kvaerner's hydrocarbon and process technology units. The two parties have been locked in talks, although Kvaerner did not expect to announce a decision at once.

A Kvaerner spokesman said: "We are hopeful we can do a deal with Yukos to complete at least one of the sales to provide immediate cessation to our problems." Yukos, which wants the oil field services for its giant Priobskoye field in western Siberia, had originally said it would conclude the sale next month.

Kvaerner's board of directors will meet its bankers and major shareholders in Oslo to explore other financing options. "If Kvaerner is unable to find a rapid solution, a critical liquidity situation will develop for the group," the company said.

Legal reasons are preventing Kvaerner from accessing Nkr1bn in receivables from its Finnish shipbuilding subsidiary, which yesterday received the final tranche for a £350m cruise ship it delivered to Royal Caribbean Cruise Line. The group's lawyers will spend the weekend trying to unlock the money. The spokesman added: "It's not as if we don't have enough liquidity within the group. It's just a question of accessing it."

Kvaerner, which issued its second profits warning earlier this month, is struggling to secure an emergency Nkr1bn to Nkr2bn rights issue in order to obtain long-term funding. Yukos, like Aker Maritime, the group's second biggest shareholder, has declined to commit itself to support the share issue.

Analysts have warned that Kvaerner will struggle to find a replacement for its chief executive, Kjell Almskog, unless it can come up with a financing solution. Mr Almskog, who fell on his sword in response to heavy investor criticism, has brought forward his departure date to next week from the end of the year. Mr Almskog was hired in 1998 to refocus the company on oil and gas and engineering and construction.