News

February 08, 2010

Sovereign Oilfield Group Continues To Seek Lending Support After Difficult Year

The latest trading update from Sovereign Oilfield Group, issued last month, had little news to cheer beleaguered investors. As previously reported, the acquisitive oil services group is locked in talks with its lenders after breaching its banking covenants: it needs to secure their support in order to continue to trade.

Investors have seen the company fall foul of the credit crunch, which hit the indebted company hard in 2008.  The debts had been run up in a post 2005 IPO spending spree designed to create what former executive chairman Graham Burgess called a “buy and build business” made up of lots of separate small companies with services ranging from drilling to cabin manufacture. 

This strategy saw the company grow to form two separate divisions: the profitable fabrication business, made up of...