Petrofac slices payout as its debts spurt

Struggling oil engineer Petrofac took a knife to its dividend on Wednesday after mounting concerns about rising debts.

The group, which is under investigation by the Serious Fraud Office, cut the payout by 42% to 12.70 cents after debts rose by $400 million (£309 million) to $1 billion.

The company is also cutting back on spending and selling a stake in a Mexican oilfield to keep the debt under control.

“We are taking a range of measures to deliver a sustainable reduction in net debt to strengthen the balance sheet, and a sustainable dividend policy for our shareholders,” chief executive Ayman Asfari said.

Net profits for the six months ending June dropped by 4% to $158 million. New order intake was $2.7 billion reducing the backlog of projects to $12.5 billion from $14 billion.

Shares are down nearly 50% since the company revealed it was under investigation by the SFO as part of a probe into energy firm Unaoil.

Petrofac suspended chief operating officer Marwan Chedid.

Asfari was also questioned by the SFO.

The firm said it “continues to engage” with the SFO.