Shareholders of loss-making oil and gas contractor Saipem have voted to use capital reserves and retained earnings to cover a massive $593m loss.

Shareholders approved Milan-based Saipem’s 2017 financial statements, which reported a loss of $593m, and agreed to cover the financial hole with reserves of capital and retained earnings in a telephone meeting on 3 May.

Struggling Saipem, operational in Saudi Arabia, Kuwait and Oman, is a loss-making company that posted a $2.4m loss for Q1 2018. This, though, marked an improved financial performance, following the $331m loss reported in Q4 2017.

READ: Italian contractor Saipem posts loss of $2.4m in Q1 2018

But big losses have forced shareholders to react with a string of measures to provide financial assistance. 

Losses will be covered by reserves of capital and retaining earnings, as well as through the company’s share premium reserve.

Shareholders approved a buy-back scheme for up to 8.8 million treasury shares with a maximum value of $46m.

A buy-back scheme will be allowed over a period of 18 months, starting in May 2018. It will be managed gradually, as deemed appropriate by the company’s board of directors, with shares bought at a unit price no lower than the minimum and not higher than the maximum official price registered on the stock market.

Saipem currently holds more than 14 million treasury shares, which are different to ordinary shares as they are not traded on the stock market, carry not voting rights, and do not contribute to dividend payments.

Saipem’s stock of treasury shares is equivalent to around 1.4% of the company’s share capital.

Saipem's chief executive officer, Stefano Cao, was voted to remain at the company. He currently owns 29,000 shares in the company.

Following news of the company’s Q1 2018 loss, Cao said Saipem hoped to generate approximately $9.7bn of revenue by the end of the financial year.

Separately, Saipem won a $750m (OMR288.7m) onshore contract for the Duqm Refinery project in Oman earlier this year.

The contract covers engineering, procurement, construction, and commissioning activities under Package 3, for offsite facilities, in the framework of the refinery development.