French-headquartered tube producer Vallourec is accelerating the execution of its cost savings program to deal with the current coronavirus situation. As with many steel companies in France, the company is said to have been drastically reducing output since last week as a consequence of a collapse in demand for finished products.
“The environment in which Vallourec operates has been through significant changes in recent weeks. The coronavirus epidemic in the countries where the group is present, combined with the sudden decline in the price of oil, will have an impact on the group’s activities, especially in North America where oil and gas operators are announcing drastic reductions in their drilling plans. It is impossible at this stage to quantify the impact of these factors on Vallourec’s 2020 performance and targets,” the company says in a statement sent to Kallanish.
Vallourec is in close contact with its banks and is maintaining a constructive dialogue with them in order to launch a rights Issue of €800 million ($858m) announced on 19 February “… as soon as conditions allow,” it adds.