Petrofac Share Discussion Threads

[mrminister] 11/4/2024 16:37

short deposit at 85% reflects the current risk of this flying higher any day soon ....and the 85% will also hurt the short punters as they could well have a margin call when the rate changed higher , i dont know when this high rate was introduced

[jerrypike] 11/4/2024 16:11

Well actually its 35(sorryGHH) to sell.....Combine that with a borrow fee of 85%.....
This does not look like its going to end well with equity.It strikes me very great caution is needed.

Good luck all

[ghhghh] 11/4/2024 15:37

The bond price is still 38-42 cents with par of 100 cents to be redeemed end of 2026. The bonds are paying out 9.75 cents p a. That's yielding nearly 25%

So who are the muppets? BH's or Equity?

[ny boy] 11/4/2024 14:38

Still not out of the woods unless 70p (previous strong support) is reclaimed and holds for some weeks

[harry_david] 11/4/2024 14:20

This is looking encouraging, I'll soon be back to breakeven.

[ny boy] 11/4/2024 14:15

Definitely building up for a move into the 40’s

[bracke] 11/4/2024 13:42

PFC WEEKLY

[blackhorse23] 11/4/2024 13:42

Only my concern about this stock is financial arrangements, I do believe they need fundraising. Group hasn't addressed anything about financial position or assets sales ??

[dipa11] 11/4/2024 13:37

I have topped up in SIPP Account bought few more today here. Don't forget the government cr for 25% topped up in June. Good luck. DYOR

[jerrypike] 11/4/2024 13:20

Any thoughts re the borrow charge of 85%(If you want to short) on the stock...Cineworld was only 80%...that was after the management told all shareholder to expect nothing.Jacnife,LogLorry ???

[dealy] 11/4/2024 12:28

it's possible that due to lack of trading, the bond price is not really "the" price

[tahmina1] 11/4/2024 12:23

Im not agreeing with Jaknife but there are risks here. Currently the bond price is the clearest indicator of that risk. However I personally believe this has significant value despite its debt situation because its in a better position than it was in COVID with a far greater demand for its services. Ultimately, a business with a queue of customers is unlikely to fail.

[loglorry1] 11/4/2024 12:16

"I had lunch with Was and Paul Scott yesterday, we all agreed that the new money always calls the shots. We were referring to Metro Bank where junior BH were complaining about being forced to take a 60% haircut. Applies here as well."

New money does call the shots. It always does and has but that's not really anything particularly profound.

Metro was very different because banks are highly regulated and highly leveraged. Furthermore they live and die on trust and going bust and winding down isn't an option because of deposit flight. The PRA has the power and the motivation to just come in and kill off all investors down to senior and hand the whole bank to Nationwide for £1.

In the case of Petrofac even if new equity did come in with new money they'd find it much harder to force losses on bond holders or deprive them from taking part at the same valuation. There is no PRA and so an entirely commercial solution can be found without regulator intervention.

[tahmina1] 11/4/2024 12:10

Respect to Jaknife and his opinion but the difference here is that PFC is a hot potato, its a businesst hat has crucial and rare skills, is pivotal to the Gulf's energy turnaround plans and its much respected world wide. It has a huge order book and is winning contracts, those contracts would not be signed without due diligence about the future of the business. What worries me here is only the bond price. its still on the floor.

[leoneobull] 11/4/2024 12:09

You might think a tripling of backlog in a year could attract additional equity investment give the dozens millions of profit within a couple of years?

[leoneobull] 11/4/2024 12:06

Jaknife. I wonder whether you can tell the difference between CINE with huge debt and PFC with 9.4 billion backlog in a different industry?

[leoneobull] 11/4/2024 12:05

Selected examples with cherry picking. What about the success stories? RR? TLW?

[fiscal cliff] 11/4/2024 11:54

Yeah, we get all that, thanks for pointing it out (again). The noise within the overall trend can be quite profitable if you only listen to it. How's retirement going?

[jaknife] 11/4/2024 11:47

Leoneobull,

"I'm guessing JN your 4p d4e fantasy is looking unlikely presently judging by price action"

Where you see "price action" that confirms your personal view I simply see "noise within an overall trend".

If you look back at EVERY major capital restructuring/D4E swap over the years you will see that in the closing death throes the share price was incredibly volatile.

1. At one point in July 2019 the share price of Thomas Cook more than trebled from c. 3.5p to 12p on speculation that a Turkish entrepreneur was going to takeover the company. Longs added to their positions as they thought that the price action meant that the company was going to be rescued. TCG was put into liquidation in September 2019.

2. On 1 November 2022 the share price of Cineworld incomprehensibly soared from 2.4p to 8.9p (+270%!) on news that its Chapter 11 plan had been approved. Again longs scrambled to buy as the price action made them think that Cineworld was being saved. The Chapter 11 plan actually set out in clear language that shareholders were going to get nothing, which finally happened nine months later.

3. In its dying days of February 2022 the McColl's share price climbed from 1.6p to a peak of 4.7p (c. +200%) because shareholders thought that "banks are supportive" meant something positive for shareholders. Retail punters piled in to jump on the price action only to see the share price crash on news of administration, suspension and total wipe out.

You forget, I've been here since 120p pointing out Petrofac's issues:

* The business has been horribly unprofitable for many years losing over $1bn in the last nine years
* The balance sheet is hopelessly weak despite a $275m capital raise in October 2021
* Since that capital raise PFC has lost almost twice the $275m that was raised
* Despite a large advance order book Petrofac is still forecast to make a loss in 2024
* The banks are explicitly no longer "supportive" and want repaying in full
* And they also want the balance sheet restored before they'll advance performance bonds (the "guarantees")
* The international bond market wants to be paid an interest rate of over 70% in order to assume Petrofac credit risk

None of the above has changed, if anything the issues have got worse and the problems have got worse.

I am unmoved in my forecast of a 4p D4E swap. Share price volatility does not actually constitute "news" as many retail punters seem to think!

JakNife

[noramping] 11/4/2024 11:29

This looks like the final push before the chickens come home to roost, maybe time to look at what you potentially will lose if a D4E happens?
Or PFC have found some money behind the settee?

It's not quite flip of a coin as the odds are heavily stacked one way