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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Petrofac Limited | PFC | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| -0.06 | -0.73% | 8.14 | 16:35:13 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 7.90 | 7.86 | 8.085 | 8.14 | 8.20 |
| Industry Sector |
|---|
| OIL EQUIPMENT SERVICES & DISTRIBUTION |
| Top Posts |
|---|
Posted at 14/1/2025 11:12 by jd96 Jaknife,In light of your comments on the lack of candour on the part of PFC and issues of trust around management I had a look at the 23 December restructuring announcement again. The more one reads it the more questions arise about what is proposed and how executable it really is. It also raises fundamental issues of equity and fairness with respect to how shareholders (and even debt holders) are being treated in terms of how the restructuring cake is being cut. What I find particularly offensive is that it appears certain shareholders (37%) - which I assume comprise A Asfari and family, AzValor Asset Management and I suspect the Employee Benefit Trust - as well as existing management subscribing for new shares are the beneficiaries of a warrant package for nil consideration that is not being made available to all ordinary shareholders. (If I am wrong about this I am happy to be corrected). What is particularly irksome with respect to any potential for handing additional shares to Asfari, AzValor and Management at no cost is that they are all being rewarded for failure (though I am sure after the losses they have sustained Asfari and AzValor probably need every free penny they can get - it certainly beats selling the Big Issue). It is worth noting a lot of fees are being paid out and there is significant leakage in what is being injected back into the business. It is also worth highlighting that the 2.5% is subject to further dilution and that given the sweep on the New Notes the prospect of any dividends will be some way off. It is also worth reflecting on how the new Note Holders are cherry picking what they get security over and how super senior their payment obligations will be. Finally, it is also worth querying whether the Ad Hoc group are being overly greedy (and ambitious) in the split between what their debt converts into and that of the other debt providers and whether this is deliverable or a try on. Would be interested to hear what others think about what is being proposed and just how realistic it is…. |
Posted at 07/1/2025 21:05 by jd96 … for clarity, Carillion still had a lot that was attractive about it’s underlying business - exposure to long dated, government backed cash flows, just a bad capital structure and the fallout from some disastrous construction contracts. I don’t believe the same can be said for PFC. Working it out could be very messy. |
Posted at 07/1/2025 09:45 by jd96 General George,I think I must be missing something really basic given where both the bonds and shares are currently trading. To get to an 81c recovery seems a leap of faith. As to the shares, I can’t see how the existing share price stacks up with the amounts being converted/potentiall Fundamentally, the shares are worthless and how they are managing to defy gravity, even at a heady eight-ish pence, is impressive. Unless there is a complete clear out of the management team, I fail to see why anyone other than desperate lenders fighting tooth and nail to avoid a massive haircut would touch these shares. It’s not as if we haven’t been here before, a few years ago there was a recapitalisation to save the sinking ship. Evidently that didn’t work, so why should it work this time. The level of value destruction is appalling. Especially for shares that traded at nearly £17 in April 2012 and subject to further issuance at a price of 115p in October 2021. Personally, I always had reservations about the profit recognition on PFCs contracts (a la Carillion and the need to keep generating new business) and considered its dividend policy was over generous (though I make no comment on who was the main beneficiary as that would be inappropriate). |
Posted at 23/12/2024 09:51 by jaknife Leoneobull,"Well, things looked very differently when pfc announced the multi billion wind contracts..." They didn't, you just allowed yourself to be distracted away from the balance sheet issues by the "shiny new toy". JakNife |
Posted at 23/12/2024 09:48 by leoneobull Well, things looked very differently when pfc announced the multi billion wind contracts... |
Posted at 22/12/2024 19:50 by failedqs Refinancing finalised - details on pfc website.Existing shareholders end up with 2.5% of the new equity. |
Posted at 01/7/2024 11:54 by armbar Petrofac has not explicitly stated that D4E is the ONLY option , pfc indicated that discussions with lenders involve a significant proportion of debt being swapped for equity as per RNSSo whilst we wait there are always other potential outcomes Takeover being one , JV another , other financial structures, appreciate D4E currently is headlining. IMO Adnoc seem to be aligned with PFC, Halliburton and Schlumberger for some time have had interest in PFC PFC now have a little more time to work out where we go Asfari and co 30% no reported sale of share holding , why ? Where are those 10% of declared short shares , not with retail imo ?So we await until advised |
Posted at 10/5/2024 07:41 by pogue Jaknifeas promised a more detailed explanation of why I believe tighter management wont work at PFC. I have not got the time I am afraid to cover this in as much detail as I wanted time is very short at the moment. Basically tighter management will cause even more costs and problems I believe. I have seen management on large projects before crack down on manhours, manhours is what contractors sell, and by doing so they try to rush a project. This has the knock on effect of wasting time producing poor documentation which begats even more as other engineers use that information to do their part of the project. Its like building a house with bad foundations. A project will take the time it needs if you rush it all you do is bury problems which emerge later much bigger and costly to fix when time is short. PFC have 2 added problems. They have I am pretty certain underbid for the contracts as they needed to win them to bolster their share price and balance sheet. That means they are starting behind already and profits will be slim even if they execute properly which is unlikely as I said projects will take the time they will take, they are non linear as the design progresses things change and rework is needed and if you are short of manhours to start it all gets very tricky. I am pretty sure this is part of the reason they are in the trouble they are in i.e. taking on work cheaper than other contractors, as I said before very few contractors will bid for ADNOC projects as their demands are too difficult to meet for the price they want to pay. Second problems is their main design office for the Middle East is in Sharja and is mainly populated by Indian national engineers. In my experience of working with departments of Indian engineers is that their culture in engineering is very odd, they hide problems to the point of blatantly lying about anything. I have seen 2 projects I have been on suffer badly from this, one where I was in charge of them. I now avoid any role where I have to be in charge of Indian based departments. You can see how this would compound issues when trying to manage tightly any work force. To do it you would need more engineers to check everything pushing up costs. Again, a reason I see why PFC have suffered in the past with back charges from the clients. As for selling PFC’s main asset if you want to call it that is their pipeline of projects without that they are just offices with one or two engineers as when there is no work engineers are fired in this industry literally to the point where work forces can go from 1000s to 100s and all experienced engineers leave as fast as they can leaving the inexperienced and useless ones behind. So as the pipeline of projects I suggest are mainly underbid and some with ADNOC who very few want to work with why buy the company? Why not let it fall and wait for the contracts you want to goto rebid? The industry is very busy just now I get calls every couple of days about jobs. The price would have to be very low for someone to want PFC. All in my opinion, I don’t hold, DYOR. |
Posted at 13/4/2024 21:05 by jaknife ryad123,"@jaknife can you explain how do you get the 4p figure from, you seem to be assuming that after the bond holders taking a haircut along with a fresh equity cash injection, the valuation will remain the same, as if the business will be worth the same even though it has less debt, dilution means the percentage of ownership shrinks not necessarily loss in absolute money terms, unless you are saying that 26p a share is misguided and the market is still mispricing pfc." I explained that in post 39,411 here: Yes "26p a share is misguided and the market is still mispricing PFC". But this is quite normal. If you look back at every major D4E swap you will find that it takes time for shareholders to come to terms with the situation and to realise that the position is not what they thought. It is very similar to the five stages of grief (denial, anger, bargaining, depression and acceptance: Note, for example, that just days ago, posters here were (very rudely) telling me that my forecasts of a D4E swap were completely wrong ... now the question is "at what price is the D4E swap going to take place?". Shareholders are always slow to realise what exactly a D4E swap means for a company. The simple fact is that, unless the bondholders graciously agree to swap some of their debt for equity, then Petrofac is insolvent. And if the bondholders aren't going to get repaid in full then why on earth should they agree to a cushy deal where shareholders get to retain a chunk of the company? Do you think that bondholders/bond funds are charities? "Would you agree that the price action in the last week is weird, who was scooping up the shares that were being dumped?"" No. And I think that I answered that in 39,438: There was an element of a short squeeze at the start of the week as the cost of borrow for PFC stock has soared to 85% and so some of the shorts decided to call it a day and close their positions. "Also how do you explain the contracts being awarded in the last few months, were all these companies mistaken about the financial health of pfc? " You (and many of Petrofac's retail shareholders) have completely misunderstood this point. It is common practice within PFC's industry that ANY important contact is guaranteed by a bank. The two big contracts that were announced on 20 Dec, for example: "Further to the Group’s market update on 4 December, today’s announcement coincides with confirmation that Petrofac has secured the performance guarantee required for the Ijmuiden Ver Alpha contract." had bank guarantees. The peculiarity with those contracts was that the only reason that the banks gave those guarantees was that Petrofac gave the banks cash collateral to mitigate their credit exposure to Petrofac. So the clients didn't make a mistake about the financial health of PFC, they explicitly made no assumption whatsoever about Petrofac's financial health, they got a bank to provide protection against ANY financial problems that Petrofac might have! The whole topic of financial guarantees is the one that forced Petrofac's hand and made them finally admit that they had a problem. The banks are no longer prepared to provide guarantees to support PFC's business unless PFC provides cash collateral for those guarantees. And whilst PFC did that with the two announced on 20th Dec it also admitted that that was not a reliable long term solution. "Last but not least metro share price didn't move much from around 35 p, the share dropped from 100p but that was before D4E was made public knowledge. Any thoughts on that Mr Jaknife?" The Metro Bank transaction was more complicated than a normal D4E swap and it's one that I decided to not get involved in. I would defer to WShak's greater expertise on Metro Bank. But the big difference was that the Central Bank got involved and threatened the subordinated bondholders with a bail-in unless they agreed to a debt for equity swap and it all seemed to get forced through on that basis over a weekend. JakNife |
Posted at 13/4/2024 07:49 by armbar Agreed been saying it for a whileSomeone wants PFC and wants it cheap , Middle East for all the reasons I have stated for several months, PFC has huge value , wind eg TenneT solution ,TenneT alone is $8bn 6 systems the feed study suggests europe need 20 Masdar the renewable arm Adnoc are JV eg RWE 11bn Seagreen perfect fit See the sustainability plans for ME Hydrogen and carbon capture first of kind at Habshan Adnoc with PFCAmmonia and OCi This has been played a beauty imo , leak, fud , shorts done their job but if they get too greedy then will be punished.Proxy battle hostile or the BOD founder are facilitating the controlling share requirements , share price rising needed to slow it down or if it broke ranks share price would fly short squeeze be near the offer price , then looks unattractive , Middle East Andoc , ME Banks imoEnterprise value £1.20 ish Discount cash flow valuation higher But that is not what they will pay imo 80p max imo Always said interesting that PFC chose Teneo and Moelis the same as Adnoc, Adnoc ipo logistics and services division raising last year $770MPFC fit in seamlessly 1.4.24 ceo adnoc gas We aim to expand internationally by acquiring new positions in the gas value chain, targeting opportunities in Europe, India, China and South-East Asia if they add value to our business.Just think how PFC fits in Just my opinion takeover or controlling stake |
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