UK: Lloyds Banking Group Boosts Enermech’s Growth with GBP 24 million Injection
Lloyds Banking Group’s Corporate Markets division has boosted the growth prospects of leading oil and gas services firm EnerMech Ltd with new funding worth £24 million.
The Aberdeen-based mechanical engineering services business will also streamline its global finance capabilities with a new international cash management facility.
The Lloyds Banking Group package incorporates the purchase of EnerMech’s existing business premises and surrounding land worth £4 million and a revolving credit facility for the company worth an initial £10 million. The deal includes an option to grow the credit facility in line with the company’s profitability up to a total of £20 million.
EnerMech has also taken on Lloyds Banking Group’s international cash management facility, which will enable the business to retain deposits of its main trading currency, US Dollars, in the UK. The move will minimise transaction costs across EnerMech’s subsidiary companies throughout the world.
Andrew Robertson, Relationship Director with Lloyds Banking Group’s Aberdeen & North of Scotland Corporate Markets Team, said: “EnerMech is a Scottish company that is rapidly creating a global presence. This deal not only provides EnerMech with a substantial amount of credit but it also enables them to benefit from our bespoke international cash management service.
“EnerMech is a great example of a thriving Scottish business that is in a strong position to grow both domestically and internationally. The EnerMech management team has a proven track record and we are delighted to be supporting their ambitious growth plans with this substantial funding package.”
Doug Duguid, Managing Director of EnerMech, added: “EnerMech has quickly built up a global reputation in all the major international oil and gas hubs and our ambition is to strengthen the Group with further acquisitions in the months ahead. We have been working closely with Lloyds Banking Group to identify the best way to develop our business and this latest deal demonstrates our commitment to long term growth.
“The international cash management solution enables us to pool US Dollars held by all our subsidiary companies around the world. This provides the business with a very efficient way to manage its main trading currency across the group.”
Formed in 2008, EnerMech provides supply, maintenance and engineering services for offshore cranes, lifting and hydraulic equipment, tools and equipment rental and the training and supply of specialist personnel. The company employs 450 staff in the UK, USA, Norway, Caspian, Middle East and Asia Pacific regions.
In the last two years EnerMech Limited has acquired Specialist Maintenance Services Ltd, A1 Safety Training Consultants Ltd in the UK, Pavitt Energy and Scotia Oilfield Trading in the Middle East and Bjorge ASA’s crane division in Norway. The most recent acquisition was hydraulic engineers Norson Power in an £11 million deal completed in April. The Shareholders of EnerMech have invested a total of £41milllion to date.
Alistair McMillan, Trade Finance and Cash Management specialist for Lloyds Banking Group Corporate Markets, commented: “Effective cash management is more important than ever in the current economic climate. We were able to provide a solution that reduces transactional costs as well as time spent by the business managing Group funds. More importantly, it provides an efficient mechanism to automatically offset credit and debit balances across the group to minimise interest costs and maximise returns.”
Source: Lloyds Banking Group,July 13, 2010;