Sovereign Oilfield Group, the oil services group that recently completed a long-awaited refinancing, has raised £420,000 to reduce debt as it battles a slowdown in activity in the North Sea.

Sovereign Oilfield Group, the oil services group that recently completed a long-awaited refinancing, has raised £420,000 to reduce debt as it battles a slowdown in activity in the North Sea.

The Aberdeen-based firm raised the money by selling a property in Cambuslang. This had been vacated by RDT Precision Engineers drilling business, which Sovereign bought in 2007 under a debt- funded acquisition programme. As RDT had moved to larger premises the property was surplus to requirements.

Sovereign said the disposal was part of a debt-reduction programme implemented by the board that had raised £10,040,000 over the last 12 months.

This included the sale of Diamant Drilling Services in Belgium, Vertec Engineering Limited and the rental fleet of Labtech Services Limited.

The company said further disposals had been ear- marked in the drilling divi-sion to focus growth on its fabrication services division.

Soevereign said the fabrication division remained profitable "despite the challenging environment and the lower prevailing oil prices".

These have dampened the demand for oil services in the North Sea, a prime market for the group.

However, the company said: "The management team have initiated cost reduction programmes across the group to remain competitive and the Group presently has an order book in excess of £25m."

In May, Sovereign concluded long-running talks with funders led by HBOS and Merrill Lynch over a new funding package which would restructure borrowings and raise investment for the fabrication division.

This paved the way for the relisting of its shares on the AIM market. They had been suspended at 21.5p on September 25 last year, Yesterday shares closed up 0.5p at 12p, giving the firm a market capitalisation of around £2m.