Cypium has drawn up a plan to create a funding package as the company reviews the margins related to eight projects.
The company reviewed its projects and concluded that it should charge around 1bn euros ($ 1.1bn) negative EBITDA this year. However, Saipam said it expects a “double EBITDA margin” from 2024.
Saipem adjusted the EBITDA to negative 1.19bn euros ($ 1.3bn) for 2021, down from a positive 614mn euros ($ 676mn) in 2020. The review was a major determinant in reducing the modified EBITDA.
Cypium expects to launch a 2 billion (2. 2.2 billion) funding package by the end of the year. Eni and the state-sponsored Cassa Depositi e Prestiti (CDP) will provide 43% of this funding, in proportion to their share in Cypium.
Banks, from Italy and abroad, will provide the remaining 57% while at the time of writing.
Cypium has also signed a short-term fluid plan. Eni and CDP will provide 645 million euros (7 710 million) in the short term for the next increase in equity capital by the end of March. Banks will provide 855 million euros (1 941 million).
Eni will also provide a guarantee for the bank’s 5 855 million facility. The plan is for the export credit agency SACE to refinance it.
Free cash flow should be positive by the end of 2023, COO Alessandro Plati said in a conference call. Saipam will hold a meeting on May 17 to discuss the plan, which aims to secure the deal as soon as possible.
“Net debt is projected to fall from 1.5 billion euros in 2021 to almost zero in 2025,” Plati said.
Next steps
Saipem intends to focus on high growth target markets. The company is considering coastal E&C, particularly in the Middle East and Africa, as its future drive for coastal drilling and coastal wind “stage mode”.
The plan does not include new contracts in Russia. Saipam said the country accounts for only a limited part of its existing backlog.
Saipim said the writing of its assets was focused on E&C Coast and Coast. The company learned some painful lessons in its coastal work. About 580 million euros ($ 639 million) was generated from the coastal wind project, the company said of its modified EBITDA impact.
چمتو Prepared by SaipemThere is a “learning curve” in the coastal winds, said Francisco Cayo, CEO of SEPAM. The company has not done any additional work in this area since October. “You have to have a clear discussion [on the risks] Before you buy projects, not after, ”Kayo said.
“The risk is drilling for foundation. You learn as you go. That cost doesn’t cover the risk of learning,” he continued. The company will return to the wind but “with different risk allocation”. There is a mistake in carrying out these projects as there were oil and gas plans. “There’s a different customer, different technology, different contract.”
COO Plateau stipulates that Cypium will not accept any contracts for Coastal Engineering, Procurement, Construction and Installation (EPCI) in 2022-23. During this period, the company will focus on low-risk performance, such as transportation and installation.
One area that Saipim intends to carry out is part of coastal drilling. Sapphire has an exceptional agreement with a potential customer, with the goal of reaching a deal before the end of May.
“The results have to be immediate. It can be a really positive outcome,” he said. The price paid is likely to exceed ملی 500 million ($ 550 million) and should close in 2022.
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