Friede Goldman Shares Drop 63 Percent on Bankruptcy Fears

Wednesday, April 04, 2001
Shares of Friede Goldman Halter, which manufactures offshore equipment for the energy industry, plummeted on Tuesday after the company said it may have to seek bankruptcy protection and canceled a scheduled conference call with investors.

Friede Goldman, whose problems stem from cost overruns on a number of oil rigs it is building, said it plans to reschedule the call. Shares of the Gulfport, Miss.-based company fell $1.52, or almost 63 percent, to $.90 on the New York Stock Exchange the day after it disclosed it was carrying $107.7 million in overdue debt.

In a filing with the Securities and Exchange Commission, the company said if it can't renegotiate its credit and raise more capital, "we may not be able to meet our obligations in the ordinary course of business and it may be necessary for us to seek protection under a petition of bankruptcy.'"

The company also canceled a conference call originally scheduled for Tuesday, citing the complexity of its negotiations with investors and lenders as well as a personal crisis, which prevented a senior executive from participating in the call.

The company said costs for two rigs it is constructing for closely-held Petrodrill IV and Petrodrill V would run some $121 million more than it expected.

It also has been hit with delays and cost overruns for two rigs it was building for Norway's Ocean Rig. The company reached an agreement for completion of those rigs last month.

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