Kvaerner hoping to avoid bankruptcy

Thousands of Kvaerner workers are waiting to learn whether its banks have come up with a rescue plan to allow it to escape bankruptcy.

Bosses of the Anglo-Norwegian engineering company met major shareholders and lenders over the weekend in an attempt to solve a short-term liquidity crisis.

Yukos Oil, Kvaerner's largest shareholder with a 22% stake, has declined to speed up the purchase of Kvaerner's hydrocarbon and process technology businesses.

This deal would have freed up £69.5m in much-needed funds for Kvaerner, which employs around 7,000 people in the UK.

Aker Maritime, Kvaerner's second-largest shareholder, is reported to have pulled out of the negotiations for now.

On October 18, Kvaerner said it was close to signing a £39m banking deal which would cover its requirements for this month.

It had been feared the company would be unable to pay its 35,000 employees that week because of a shortage of cash.

But Kvaerner stated at that stage it would need additional funding towards the end of November. It hoped to have secured long-term financing by then, and to have released further details of a proposed rights issue of up to £157.4m.