Sparrows puts itself up for sale over debt

Published on Friday 27 January 2012 00:00

AN ABERDEEN crane hire business has been forced to put itself up for sale as lenders put pressure on its owners to call in more than £100 million worth of debt.

Sparrows Offshore, which employs around 2,000, is understood to have appointed investment bank Evercore to complete the sale.

The firm, founded in 1973, has been subject to a number of private-equity backed buy-outs. The last of these was in 2008, when Close Brothers gained a majority share after it led a £142m tertiary buy-out from London Merchant Securities.

According to the firm’s 2010 annual report, Sparrows was forced to agree new lending terms whereby payback on large tranches of its debt had been brought forward, from as late as 2018 to 2013. It also paid £200,000 to its lenders and a further £700,000 in professional fees to “defer covenant tests”.

Net debt totalled £179m. The group made a loss of £65m on a turnover of £150m. The firm, which has operations around the globe, took a £47m impairment hit after the Deep Water Horizon catastrophe in the Gulf of Mexico caused the US government to call a moratorium on drilling. The 2008 buy-out was backed by the Royal Bank of Scotland and lenders are thought to include Barclays, Lloyds Banking Group and HBSC.

In November Sparrows launched a recruitment drive to fill 143 newly created jobs after it announced it had secured contracts worth £32m.

Sparrows was unavailable for comment last night.

ERIKKA ASKELAND

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