Petrofac Share Discussion Threads

[halfpenny] 23/3/2024 07:26

We are now closer to Success every day and Top Analysts are Targeting 45-54p. Some higher.


Mega Sales increase and Non Core Assets sold with RNS on the way.

Happy Days Ahead.

[dipa11] 22/3/2024 23:05

"SMALL CAP----------SocGen raises Petrofac price target to 27 (26) pence - 'hold'

[wellbutpoor] 22/3/2024 19:32

All quiet on the western front this evening.....

[geckotheglorious] 22/3/2024 10:51

I guess you're spamming this Tower Resources rubbish across multiple boards!
We know why you're a blue poster!

[riskyinvestor] 22/3/2024 10:50

Tower Resources (TRP) is the Stock to be in

[halfpenny] 22/3/2024 07:48

We are now closer to Success every day and Top Analysts are Targeting 45-54p. Some higher.


Mega Sales increase and Non Core Assets sold with RNS on the way.

Happy Days Ahead.

[whites123] 22/3/2024 06:54

ghhghh

Oh dear, your remarks leave me utterly bewildered.
You pluck figures out of thin air, 100 here and 100,000 there, and boldly declare that the former are the wisest.
It's quite amusing.
These shorting entities possess certain advantages over the majority of individual investors.
Firstly, they have the liberty to circulate unregulated narratives tailored to their agenda.
Secondly, they command access to substantial financial resources, to the tune of millions.
If you entertain the notion even for a moment that these entities possess privileged insights into undisclosed accounts and the specifics of proposed short-term financing, then you're truly lost in a world of make-believe.
The shorting maneuver is precisely that – an assault aimed at instilling fear, propagating alarmist tales, and outspending retail investors in a bid to suppress buying activity.
And what's the result?
A plummeting stock price.
If you genuinely believe that market sentiment dictates its course, then you're evidently ignorant of the realities.
It's money, and vast sums of it, in the order of trillions, that truly steer market movements.
I urge you to delve into the background of these shorting entities targeting PFC. Save for one exception, they're all nothing but charlatans.

PFC = STRONG BUY

[armbar] 21/3/2024 22:18

Yet some of the most successful hedge funds are not declared short Now if they were then a totally different proposition Question is why ?

[ghhghh] 21/3/2024 18:50

lol

So you are effectively saying that the 100,000 most stupid illiterate people in the UK are collectively smarter than say the 100 most intelligent, best informed people?

You must be having a laugh?

[whites123] 21/3/2024 18:37

Isn't it amusing how some individuals resort to comments like,
"So either they are ALL incompetent idiots or you are wrong?"

We could easily reframe this by pointing out that 89% of shares are held by investors who see value, whereas the remaining 11% short belong to unregulated entities like bucket shops.

But actually 100% of shares are held by investors who see value as the shorts are using stock they do not own.
It's quite telling how far people will stretch to validate their own perspective and discredit ours.
The fact remains that 89% (100%) of shareholders consider this a sound investment, and their collective expertise far outweighs that of the minority.
Let's hope those shorting the stock face the consequences of their actions.

PFC = STRONG BUY

[ghhghh] 21/3/2024 18:01

Binary? As in 50:50? That would be a lousy risk reward.

Clearly it’s you versus a load of professional, well connected shorters with access to research way beyond that available to us humble armchair PI’s.

I fear that you are committing the cardinal rule of falling in love! Or at the minimum, becoming emotionally attached.

When I first started investing a sage old hand told me to dump all emotional baggage, shares are to be traded ruthlessly. If you are sitting on a loss the mugs will try to ride it out. The professionals will constantly reevaluate the risk reward and dump immediately if it goes against them. Loses are the ultimate emotional baggage

Opportunity cost is the name of the game. There are some amazingly good risk reward options in the Investment Trust sector, especially REIT and Infrastructure, where you can buy at historically high discounts to NAV, get 9% dividend yiel and wait for discounts to reverse with falling interest rates and more compellingly, replacement costs now 20% higher and inflation linked rising revenues. Stunningly safe mid term value.

Whereas you must admit PFC is high risk? Unless you know more than the shorters and obviously you don’t!

[leoneobull] 21/3/2024 17:57

Appolo. Approached WG but failed to buy them. Don't like to overpay. Provide a couple of hundred million usd injection to pfc, see the business transformed as cashflow improves with guarantees reinstated. Backlog could be 16 bn again in 2 to 3 years. Private equity flip and relist on MENA country stock exchange instead or flog to Halliburton or Schlumberger who would manage it properly and extract higher margins?

[leoneobull] 21/3/2024 17:52

JN. The banks are owed 250m through RCF and term sheets. There's 105 to 120m due from legacy payments on 2 projects according to Slift on LSE..completed in Q1. Non-core asset sales could raise 120m usd. Reduction in collateral req's would free up advance payments for working capital. They've managed to get guarantees for UAE habashan plus Tenne T project stage 1 already. I'm sure they need to raise capital. The question is how much? Also, is all the adverse publicity of forcing a d4e worth it when this cyclical business is quickly recovering?

[leoneobull] 21/3/2024 17:25

It's possible we are incompetent idiots, equally. That's the nature of binary situations

[halfpenny] 21/3/2024 17:23

It will not be a Rabbit buy a KANGAROO !!

Target 45-54p gets closer every day..

[jaknife] 21/3/2024 17:14

wellbutpoor,

"The banks are in a Prisoners Dilemma.

There's no value in a D4E at these levels and they know it.

The best chance of turning this one around is for everyone to stay in the game."


I fear that you've completely misunderstood the strength of the bank's position, as well as how a Debt for Equity swap might work.

The most extreme version of a D4E would remove shareholders entirely leaving the banks owning 100% of Petrofac and shareholders nursing a total loss (eg this is what happened with Cineworld).

How could it possibly be better for the banks to let "everyone to stay in the game" and, for example, let shareholders retain a 10% interest?

How could the banks get a better deal than owning everything?

JakNife

[armbar] 21/3/2024 17:06

So either they are ALL incompetent idiots or you are wrong?ghhghh I am just stating that the narrative on here for last few months have been covenants broken , bankruptcy , administration, D4E at 5p, bond clauses , often it seems the narrative is desperate, and incorrect, nothing is defined and often assumed or just an opinion. Now the 11% could indeed be right however the outcome of the restructure is undetermined and it is about probability , I do not underestimate the 11% and sure they have done all their due diligence , and likewise. My question, what are the options available to the BOD , Founder, which have a viable solution which suits their interests and solves the challenge ? Some options are above , they would likely to be top of the list imo April update or as appropriate , and the BOD will not give a running commentary as stated on the call, could go either way but I have an opinion as you know. GL

[wellbutpoor] 21/3/2024 16:45

The banks are in a Prisoners Dilemma.

There's no value in a D4E at these levels and they know it.

The best chance of turning this one around is for everyone to stay in the game.

[armbar] 21/3/2024 15:07

Exploring non core asset sale x millions In active discussions on a non controlling stake meaning ? Cash injection for shares ? Profit split ? Share swap ? Private deal ? Apollo or ME Legacy closure contracts x millions Extend or a new credit line provider Joint venture MBO could acquire at a deep discount Takeover Equity raise at what level and for how much ?Debt for equity last on the list imo Probably a combination of some of the above excl MBO, Takeover as you are either in or out Now those 60M plus declared short position and the 30M schroders shares, who has them ? It is not all with retail imo. GL

[loglorry1] 21/3/2024 13:04

"a haircut and a sweetener and extension"

The problem is that a bank will have to provision for a bad debt because the auditors will look at the credit rating and where the bonds are trading and force that upon them. They probably already have provisioned for it. If there is a chance they can get paid back they can write back the provision.

I'm not sure why they have to take much if any of a haircut as they are first in line to get paid and even the bears would argue PFC is worth $252m. They just need to do a deal with the BH and get it done.

An extension makes things worse as they become closer to the bond maturity and at the moment one of the best things in their favour is maturity seniority.

As for a sweetener - what do you think that might be? Higher interest rate making PFC even less profitable in the run up to the bond cliff? Warrants? How would they value these on their balance sheet? But ultimately the business needs to be sorted out properly which is what the company keeps telling you in the RNSs with a significant balance sheet event. It's just you don't seem to want to admit it. Give them equity? Isn't that what the bears are saying will happen?

EDIT: do you think the banks should be given extra interest to compensate for the extra risk if they extend to say the same redemption as the bonds? If so the market price for that is 60% YTM on the bonds. That would mean $151m in interest each year to pay on the RCF! Would you like to be holding equity in that situation?

[jaknife] 21/3/2024 11:51

loglorry1,

"If JN did increase his short all the way down it's proving to have been a very good strategy so far."

I've added to my position at various times on the way down (from when I started at 120p in Oct 2022), as my conviction has increased. But fundamentally there is one reason why you need to do this (or close out completely) as the share price falls - compound interest.

On a long position compound interest works in your favour, as the share price goes up then your position size gets bigger and hence a "winning share" becomes more important to your portfolio. If it continues to "win" then the value that it adds each day/week/year gets greater and greater each day/week/year.

The opposite happens with a short position. If you have a winning short then what was 1 unit of short becomes half a unit of short and hence the position becomes less relevant to your overall portfolio economics. And the next 50% down only adds 0.25 of a unit to your portfolio economics and leaves a tiny position size.

Hence you need to reassess your position sizes on a regular basis and either (a) add to them to take them back to a full position size, or (b) close the position entirely and focus your attention on a different stock.

FWIW I added to my position only last week precisely because of the above.

JakNife

[leoneobull] 21/3/2024 11:51

I take your point log but banks are alone pragmatists. Given the choice between a haircut and a sweetener and extension, banks often choose the latter. What was the last extension of a year, if it was not some slack cutting?

[geckotheglorious] 21/3/2024 11:03

Log


"Banks don't "cut companies slack" because they are not in it for the upside. Their upside is capped and so they are laser focussed on avoiding losses. A bank runs extremely high leverage on its equity therefore it is imperative they don't suffer losses from loans"

This is what most Equity investors fail to understand. I, myself, was in that group several years ago.