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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
|
|
|---|---|---|---|---|
| 0.80 | 3.31% | 25.00 | 16:35:10 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 23.92 | 23.40 | 25.30 | 25.00 | 24.20 |
| Industry Sector |
|---|
| OIL EQUIPMENT SERVICES & DISTRIBUTION |
| Top Posts |
|---|
Posted at 18/4/2024 10:00 by loglorry1 "Why on earth can't they do an RI to raise 200m, half of which goes to buy back bonds like Tullow did"Because the market cap is 118m so they'd need equity investors to nearly treble their cash exposure to PFC shares. It is in theory possible via some sort of deeply discounted rights issue at say 5p but in practice it won't work because the shares are mostly held by private investors now who would have to put in far too much money. Since institutional investors see the equity as worthless cf. bond price then they won't put more capital in. Furthermore, £200m doesn't buy back much of the $600m bonds even at a discount and they also need to pay off the banks to the tune of $252m. Furthermore, they need working capital of 200-400m on top. Furthermore, TLW didn't do a rights issue they raised debt at 15%. They are throwing off loads of cashflow too so its not remotely the same. Do you see just how hopeless it is? |
Posted at 17/4/2024 11:01 by jaknife dealy,It's likely that there will be a debt for equity swap. Because the company has told us that that's what they're working on. In addition to that they're likely to raise fresh equity as well as make some small disposals. Because the company has told us that that's what they're working on. In that respect it is helpful to remember a key adage: New investors dictate the terms to old investors. JakNife |
Posted at 16/4/2024 16:18 by loglorry1 Fitch Downgrades Petrofac to 'CC'; Removes RWNFitch Downgrades Petrofac to 'CC'; Removes RWNFitch Ratings-London-16 April 2024: Fitch Ratings has downgraded Petrofac Limited's (Petrofac) Long-Term Issuer Default Rating (IDR) to 'CC' from 'B-' and senior secured debt rating to 'CC' from 'B-'. The Recovery Rating is 'RR4'. Fitch has simultaneously removed the ratings from Rating Watch Negative (RWN). A full list of rating actions is below. The downgrade reflects increased risk of imminent restructuring that would be perceived as a distressed debt exchange (DDE) under Fitch's Corporate Criteria. This follows Petrofac's public announcement that ongoing discussions with its lenders would result in a debt exchange. Fitch expects to downgrade the Long-Term IDR to 'C' on announcement of a proposed debt exchange, and further to 'RD' (Restricted Default) on its completion, in accordance with our rating definitions. Key Rating Drivers Increased Risk of Imminent DDE: We believe that an imminent default of some kind is probable despite ongoing discussions with lenders, prospective investors and certain major shareholders. On 12 April 2024 Petrofac announced that ongoing discussions with its lenders to restructure its debt would result in a significant proportion of the debt being exchanged for equity in the business. Fitch expects this proposed debt restructuring to result in a material reduction in terms for creditors, which it would view as a DDE under Fitch's Corporate Criteria. Inevitable Balance-Sheet Restructuring: A performance guarantee is a standard contractual requirement in engineering, procurement, and construction (EPC) contracts. It is typically provided by banks as a financial back-stop to clients that project delivery will be in line with the agreed terms, and if not to provide financial remedy. A protracted inability to secure guarantees could lead to a broader commercial fallout for Petrofac, including potential cancellations of contracts and challenges in obtaining new contracts. Uncertain Measures to Support Liquidity: The execution risk of Petrofac raising additional capital is exacerbated by the fairly limited value of its non-core assets, low market capitalisation and the resulting need to explore a broad range of financial options. A potential solution could include equity injections from financial investors via the acquisition of a non-controlling stake in components of the business portfolio. The group continues to explore various other financial options. Sound Business Profile: Petrof Derivation Summary Petrofac's 'CC' Long-Term IDR reflects increased risk of an imminent debt exchange, which would be viewed as a DDE under Fitch's Corporate Criteria. Petrofac has no close direct Fitch-rated peers. We view Petrofac's business profile as weaker than Saipem S.p.A.'s, due mainly to the latter's significantly stronger revenue visibility supported by its large backlog. We view Petrofac's business profile as weaker than John Wood Group plc's due to declining revenue visibility related to the group's inability to secure performance guarantees. Both companies have a solid position in their core markets and sound geographic diversification. Key Assumptions -Revenue of around USD3.0 billion in 2024, and gradually increasing to USD4.1 billion in 2026, versus USD2.7 billion in 2023 -Negative EBITDA of around USD70 million in 2023; EBITDA margin at about 1% in 2024 and 3%-5% in 2025-2026 -Working-capital outflow of about 1% in 2023, and working-capital inflows in 2024 and 2025 -Non-core assets disposal proceeds of about USD60 million in 2024 -No dividends and acquisitions in the next four years Recovery Analysis -The recovery analysis assumes that Petrofac would be reorganised as a going-concern (GC) in bankruptcy rather than liquidated. It mainly reflects Petrofac's strong market position, engineering capabilities, customer relationships and asset-light business model, following disposals in the integrated energy services division -For the purpose of recovery analysis, we assume that the debt comprises USD600 million senior secured notes, its USD162 million RCF (full drawdown assumed) and USD90 million term loans. We assume that all debt instruments rank equally among themselves -The GC EBITDA estimate of USD107 million reflects Fitch's view of a sustainable, post-reorganisation EBITDA level on which we base the enterprise valuation (EV). Stress on EBITDA would most likely result from severe operational challenges in lump-sum projects -Fitch applies a distressed EBITDA multiple of 4x to calculate a GC EV. The choice of multiple mainly reflects Petrofac's strong market position being offset by weak revenue visibility and demand volatility in the oil and gas end-markets -After deducting 10% for administrative claims, our waterfall analysis generates a ranked recovery for the senior secured debt in the Recovery Rating 'RR4' band, indicating a 'CC' instrument rating for the group's USD600 million senior secured notes. The waterfall analysis output percentage on current metrics and assumptions is 45%. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: -An upgrade is unlikely given the announced prospect of a debt exchange. It would require a debtor-friendly transaction leading to significant improvement in liquidity and a sustained ability to obtain performance guarantees (and/or advance payment guarantees) for both existing and future projects Factors That Could, Individually or Collectively, Lead to Downgrade: -Announcement of the debt exchange or other form of debt restructuring, which Fitch would view as a DDE -Non-payment of any of financial obligations under the current capital structure -Full liquidity erosion with imminent irrevocable impairment of payment capacity Liquidity and Debt Structure Limited Liquidity: As at 30 June 2023, Petrofac's liquidity profile comprised USD152 million readily available cash (excluding around USD101 million deemed not readily available by Fitch, mainly for intra-year working-capital swings). The group has access to an USD162 million RCF (fully drawn at 30 June 2023). The main upcoming maturities include about USD90 million term loans and an USD162 million RCF drawdown both due in 4Q24. We estimate positive free cash flows in 2H23 and 2024. Long-Dated Debt Structure: As at 30 June 2023, Petrofac's debt maturity profile mainly comprised USD600 million senior secured notes due in 2026. Immediate maturities are around USD90 million term loans and USD162 million RCF, both due in 4Q24. Issuer Profile Petrofac is an international E&C service provider to the energy industry. The group designs, builds, operates and maintains oil and gas facilities, delivered through a range of commercial models (lump-sum, reimbursable and flexible). REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit hxxps://www.fitchrat |
Posted at 15/4/2024 17:27 by geckotheglorious ArmbarPost 39739 It did not say it revolves around a D4E but an option, engaged and in discussions , it is also in discussions with potential investors and main shareholders Erm, go read the RNS again. It clearly does. Honestly I give up people add words Who is doing that? But IF it happens and it is D4E 20p or 22p, You may say told you so, in reality if this happens you were 400% out , stated 4p for months One thing I have not done is speculate what level the D4E would be at. Above my pay grade, and , despite being a potential buyer some time back, have never taken a position due to the excellent analysis here of those short. Always pays to listen to the bond investors. |
Posted at 15/4/2024 13:21 by jaknife Armbar,"It did not say it revolves around a D4E but an option, engaged and in discussions , it is also in discussions with potential investors and main shareholders Honestly I give up people add words , But IF it happens and it is D4E 20p or 22p, You may say told you so, in reality if this happens you were 400% out , stated 4p for months , breaking covenants etc if you are right I will be the first to say well called but I have a differing opinion to the outcome." FFS, read the words! From the RNS: ==================== The Company has engaged and remains in discussions with its lenders to restructure its debt which would result in a significant proportion of the debt being exchanged for equity in the business. It also continues to be in discussion with prospective investors and certain major shareholders in relation to potential further investment in the Company and remains in negotiations with prospective purchasers regarding the sale of non-core assets, as set out in recent announcements. All options remain under consideration. ==================== This splits into two separate parts: A. "The Company has engaged and remains in discussions with its lenders to restructure its debt which would result in a significant proportion of the debt being exchanged for equity in the business." There will be a debt for equity swap. B. "It also continues to be in discussion with prospective investors and certain major shareholders in relation to potential further investment in the Company and remains in negotiations with prospective purchasers regarding the sale of non-core assets, as set out in recent announcements. All options remain under consideration. In addition to the D4E swap Petrofac is also investigating ways to raise additional funds. You are deluding yourself with your attempts to make the situation look better that it is. Petrofac is Petrofacked! "Going round in circles, If you have the bond clauses please share i doubt you have them but I maybe wrong happy to be wrong if you have them" Contact the IR dept, they will ask you to sign an NDA and then give you the bond terms. JakNife |
Posted at 15/4/2024 12:11 by armbar It did not say it revolves around a D4E but an option, engaged and in discussions , it is also in discussions with potential investors and main shareholders Honestly I give up people add words , But IF it happens and it is D4E 20p or 22p, You may say told you so, in reality if this happens you were 400% out , stated 4p for months , breaking covenants etc if you are right I will be the first to say well called but I have a differing opinion to the outcome. Going round in circles, If you have the bond clauses please share i doubt you have them but I maybe wrong happy to be wrong if you have themLets see who these new potential investors are ? What stake ? What price ? Plus main shareholders participation ?Joint venture Adnoc or ApolloTakeover Restructure D4E If so at what price GL it wont be pretty Why the non committal RNS which outlined what we already knew and halted the share price ? Ask yourself you are the BOD Founder etc why would you ? |
Posted at 13/4/2024 05:16 by miena If a D4E was inevitable then surely yesterdays RNS was the perfect platform to reinforce this message?? But did they...If you read the RNS it clearly states that they are reviewing 3 options all of which were known by investors prior to the RNS. So what was the purpose of Yesterday's RNS, was it to remind us all about what we have already known for some time?? For me this was a deliberate ploy by PFC to derail the share price, but why?? Could this possibly have something to do with it...?? "It also continues to be in discussion with prospective investors and certain major shareholders in relation to potential further investment in the Company" I have been in this game a very long time and have seen it all before particularly in this Sector. I smell a rat and it stinks of a hostile take over! MARK MY WORDS... |
Posted at 12/4/2024 09:59 by jaknife dealy,"JK, normally I would agree with your assessment, but there is, imo, one element that makes this case slightly less fatal, namely a strong order backlog and pipeline. That creates room for alternative financing to take place." I struggle to remember the times when you've vocally agreed with me here but I am getting old, perhaps it's my poor memory? I would agree with your assessment that PFC's "strong order backlog and pipeline" mean that the D4E swap shouldn't be fatal. But beyond that I don't understand what "alternative financing" you're expecting? There's going to be a D4E swap! The relevant question is "at what price?" When it comes to Petrofac's "strong order backlog and pipeline" I will make the same points that I've been making for months now: * PFC has always had a large order book but the margins have been trivial and because of numerous problems actually they've lost money repeatedly. * Over the last nine years PFC has lost over $1bn! * Despite a large advance order book Petrofac is still forecast to make a loss in 2024! The "strong order backlog and pipeline" mean that there should be interest and support for a fund raise but it doesn't mean that new investors are going to put that money in at a generous level. The phrase that applies here is: New investors dictate terms to old investors I'm really sorry but current shareholders are going to be materially diluted. JakNife |
Posted at 13/3/2024 15:58 by loglorry1 A lot to unpick there.Different from Metro equity as you know because PRA regulator forced cram on subbies and Gilinski didn't want to put new money in at lowest possible price because it didn't make a lot of difference to his eventual holding and more importantly didn't want to create run on bank by wiping out traded equity value. Regardless its not share price that matters its market cap and I think Metro was much lower. Not sure how current equity can raise £100m at 20p given how much is currently in hands of private investors that's a big shout. Equity holding up because any not held by private investors are probably inside and private investors never sell at what they regard derogatory prices. Derogatory price = less than they paid. On the other side maybe a bit of short covering here and there and borrow costs are high so its expensive to stay short. "I can't remember such a disconnect re other reconstructions?" Then you have a poor memory. A few months ago Casino? |
Posted at 27/12/2023 21:54 by mj19 Petrofac Limited (LON:PFC) Stock Rockets 26% But Many Are Still Ignoring The CompanyThose holding Petrofac Limited (LON:PFC) shares would be relieved that the share price has rebounded 26% in the last thirty days, but it needs to keep going to repair the recent damage it has caused to investor portfolios. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 44% in the last twelve months. Although its price has surged higher, you could still be forgiven for feeling indifferent about Petrofac's P/S ratio of 0.1x, since the median price-to-sales (or "P/S") ratio for the Energy Services industry in the United Kingdom is also close to 0.6x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake. Check out our latest analysis for Petrofac How Has Petrofac Performed Recently?While the industry has experienced revenue growth lately, Petrofac's revenue has gone into reverse gear, which is not great. Perhaps the market is expecting its poor revenue performance to improve, keeping the P/S from dropping. If not, then existing shareholders may be a little nervous about the viability of the share price. Keen to find out how analysts think Petrofac's future stacks up against the industry? In that case, our free report is a great place to start. How Is Petrofac's Revenue Growth Trending?The only time you'd be comfortable seeing a P/S like Petrofac's is when the company's growth is tracking the industry closely. Retrospectively, the last year delivered a frustrating 5.2% decrease to the company's top line. The last three years don't look nice either as the company has shrunk revenue by 47% in aggregate. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth. Looking ahead now, revenue is anticipated to climb by 19% per year during the coming three years according to the seven analysts following the company. Meanwhile, the rest of the industry is forecast to only expand by 3.9% per annum, which is noticeably less attractive. With this in consideration, we find it intriguing that Petrofac's P/S is closely matching its industry peers. It may be that most investors aren't convinced the company can achieve future growth expectations. The Final WordIts shares have lifted substantially and now Petrofac's P/S is back within range of the industry median. It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator. Despite enticing revenue growth figures that outpace the industry, Petrofac's P/S isn't quite what we'd expect. Perhaps uncertainty in the revenue forecasts are what's keeping the P/S ratio consistent with the rest of the industry. At least the risk of a price drop looks to be subdued, but investors seem to think future revenue could see some volatility. tute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.Join A Paid User Research Session?You'll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here |
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