Petrofac Share Discussion Threads

[jaknife] 23/6/2024 19:07

Mr Pierrepoint,

"The downside risk from these levels is low in my opinion. Any one of the many positive outcomes could be announced as early as tomorrow. The shorts aren’t stupid, and it’s unlikely they will ‘burn’ as some might hope for. They’ve made their money from much higher, and now it would appear they are closing their positions in an orderly manner.

I hold, and plan to accumulate further over the next four sessions."

This is an absurd point of view.

Petrofac have explicitly told you that:

1. "The Financial Restructure ... is currently the only option to secure the future operations of the Group and active discussions are ongoing. The realistic alternative to the Financial Restructure is insolvency." [my bold]


2. "By virtue of not having paid the interest coupon under the terms of its senior secured notes of US$29 million on its due date of 15 May 2024, the Company is in default." [my bold]


3. "To date, the Company has agreed deferrals of its contractual amortisation payments on its bank debt facilities, in part since October 2023, and more recently from April 2024, which now amount to US$84 million currently due on 31 May 2024. It is expected to continue to rely on further deferral of these obligations by its lenders, which to date, have been providing these for no longer than on a rolling weekly basis."


4. "Even without making payments to its noteholders and lenders, the Group forecasts to have minimal headroom above its US$75 million minimum liquidity covenant until the Financial Restructure is implemented. To maintain this liquidity, the Group is having to manage its payment obligations carefully, including by seeking to delay all but critical payments to creditors and by not funding obligations under operational joint venture arrangements."


5. "In light of these risks, as part of the negotiations of the Financial Restructure, the Company’s secured creditors have required the Board to work on various contingency plans including making preparations for alternative outcomes to a successful restructure. This includes changes to the Group structure to create a single point of enforcement. In addition, work has been required to evaluate which parts of the Group, if any, could be separated and continue to trade independently. These assessments are ongoing and expected to be completed prior to the implementation of the Financial Restructure. Such contingency plans, if enacted, in the absence of a successful implementation of the Financial Restructure, would likely result in the Company entering an insolvency process. The future intentions of Lender Group stakeholders in this regard cannot be known with certainty by the Board.

In the event of an unremedied default by the Company, the lending group could exercise their security rights which would likely result in the Company entering insolvency proceedings." [my bold]


Hence the "downside risk from these levels" is 100% with a significant non-zero probability attached to it. Even if the company escapes insolvency then there is going to be a significantly dilutive debt for equity swap.

The idea that anyone would buy share of Petrofac at this point of time thinking that this is a good investment or that there is even one "positive outcome" is simply insane.

JakNife

[the technical trader] 23/6/2024 10:41

History doesn't repeat itself, but it rhymes. This is how I think PFC is moving:



It's as easy as ABC.

GLA

[mr pierrepoint] 23/6/2024 07:43

Auto-Archived

[hmgouda] 22/6/2024 19:24

halfpenny, I noticed that when the share price was going down you were saying it will go up. Now you are saying it will go down.

[halfpenny] 22/6/2024 12:27

OH! Dear Falling like a Stone or Lead Ballon ..!!!

Petrofac has failed to generate a concrete plan to restructure the business and shore up the balance sheet,” Hargreaves Lansdown said in a note to investors. “As a result there are now pressing concerns about the company’s ability to survive. Even if the situation is resolved, paying its lenders in shares rather than cash is a distinct possibility. That would mean investors’ ownership of the company would be significantly diluted.”

Humpty DUMPty Falls How Low How Soon. RISKY

[npk2] 21/6/2024 19:00

You have to be without a shred of doubt one of the biggest phoney's on ADVFN.Your posting history says it all.Unfortunately, I witnessed it in real time.Pick a bridge.

[socionomics] 21/6/2024 15:08

In the words of Kevin Keegan....I would absolutely love that!

[loglorry1] 21/6/2024 15:07

What's your strategy JN if this is suspended and you have to pay 250% borrow charge while the bondholders and banks wind it up and sell off the parts for what they can?

[denholm elliott] 21/6/2024 14:35

Shorts desperately closing. Make em pay lads.Short squeeze

[geckotheglorious] 21/6/2024 13:52

Socionomics
Post 40771
Watch and learn JakNife.

Oh dreary me...
Only one person needs to watch and learn, and that'd be you.

As events will soon prove.

[socionomics] 21/6/2024 10:15

Watch and learn JakNife.

[millennialinvestor] 21/6/2024 09:52

I was hoping to go to ShareStock this Sept to meet some legends, JakNife, Tom etc, but don't think I am going to be able to make it

[socionomics] 21/6/2024 08:23

The price and volume profiles are lining up to break 20p again. Should kick-in later today or the first part of next week.

Easy money!

[millennialinvestor] 21/6/2024 08:06

JakNife delivering another DPD express parcel of destruction to more deluded longs.

[halfpenny] 21/6/2024 06:58

CRASH!!
Oh Dear many lose out as Humpty DUMPty Falls.

Petrofac has failed to generate a concrete plan to restructure the business and shore up the balance sheet,” Hargreaves Lansdown said in a note to investors. “As a result there are now pressing concerns about the company’s ability to survive. Even if the situation is resolved, paying its lenders in shares rather than cash is a distinct possibility. That would mean investors’ ownership of the company would be significantly diluted.”

Humpty DUMPty Falls How Low How Soon. RISKY

[pacsltd] 20/6/2024 20:05

Personally, I think Humpty Dumpty is a bit of a bighead.