Petrofac Share Discussion Threads

[jaknife] 15/7/2024 07:47

A fellow conspirator points out that the bond price is now 15.75 bid:



They claim that the bondholders are resigned to a break up deal with everything being sold off.

JakNife

[geckotheglorious] 15/7/2024 07:24

Bloomberg article can be found on Financial post in full

Petrofac's Restructuring Talks in Limbo as Debt Deadline Nears
[...]

I see ADVFN is censoring Financial post as a source.

[...]
financialpost.com/pmn/business-pmn/petrofacs-restructuring-talks-in-limbo-as-debt-deadline-nears

Sadly I cannot find a version of MEED article that isnt paywalled.

[dealy] 13/7/2024 07:32

The failure by management to foresee the criticality of maintaining a strong balance sheet to ensure the timely securing of performance guarantees has put the company into a death spiral.The only beneficiary of this debacle is the FCA or SFO (or whatever body it was) that sucked 100m in fines out of the shareholders that stumped up the cash in late 2021

[jaknife] 12/7/2024 18:29

I don’t have access to read this story:

Algeria delays Petrofac contract award

The contract has been estimated to be worth $1bn



I presume that this is the contract referred to in the accounts that was going to invoke default if the performance guarantee wasn’t provided swiftly.

[jaknife] 12/7/2024 18:22

This is the text of the article. There is another story out there that is of greater concern. First Bloomberg:

=======================
UK energy services company Petrofac Ltd is running out of time to agree a debt deal with creditors, after months of talks have failed to produce a definitive agreement.

The London-based firm missed a bond payment in May and has until July 25 to find a solution with creditors. Failure to do so could lead to an extension of the deadline, or force the company to immediately repay debt.

At the moment the talks are locked in a Catch-22 situation because bondholders want financial institutions to give performance guarantees — insurance against project failure — before they provide rescue financing, yet banks and other providers only want to do so if the capital structure of the company is made more sustainable, said people familiar with the matter.

Petrofac is hoping to resolve the deadlock as soon as possible, said the people, who spoke to Bloomberg on the condition of anonymity. A spokesperson for the company didn’t immediately respond to requests for comment.

While bondholders have offered up to $200 million of new financing and another $100 million of credit support, which would enable it to convert a significant proportion of existing debt to equity, the deal is contingent on securing these performance guarantees. That hasn’t happened yet, the people said.

The company’s financial problems stem from legacy loss-making contracts, which are weighing on its liquidity. That’s hampered its ability to access the performance guarantees, key to carry out projects, just as it tries to win more new business to add to a $8.1 billion pipeline of contracts.

The situation has led the company’s high-yield bonds maturing in 2026 to lose much of their value in the secondary market, where they are quoted at 18 cents on the dollar versus around 79 cents a year ago, according to CBBT data compiled by Bloomberg News. Its stock has also slid over 80% in the same period.

Its debt totaled $784 million at the end of last year, while its liquidity position was only $201 million at the end of 2023.

Another factor complicating the debt talks is that the performance guarantees are provided across multiple projects and jurisdictions, involving a lot of parties, the people said.

=========

[ghhghh] 12/7/2024 15:48

Can anyone please sum up what the article says?

Is there any meat to the headline?

[blackhorse23] 12/7/2024 14:58

https://www.bloomberg.com/news/articles/2024-07-11/petrofac-s-restructuring-talks-in-limbo-as-debt-deadline-nears

[halfpenny] 11/7/2024 22:23

A debt for equity is coming so expect 50 percent fall to 6p or less.

Disaster wot a ness!!!

[mj19] 11/7/2024 14:41

How come this won't dropLower? Is this fair value? Aren't we waiting on financing outcome

[farrugia] 10/7/2024 10:52

hmm bond is now trading at just 18 cents to the dollar. I sold mine at 27 cents just a month or so ago. This should be alarming for shareholders. If bond holders lose shareholders are definitely going to be wiped out. Additionally it is not possible to open a short on the stock with my broker 'insufficient shares for short sale' - otherwise one could try an arbitrage - go long bonds, short stock. The borrow fee is now 272% per year of holding a short position - that's what's supporting the price up.

The problem is the debt - its too much - the risk is that bondholders walk away instead of throwing more good money after bad. Dead man walking comes to mind, will need a miracle at this point.

[geckotheglorious] 09/7/2024 15:28

Armbar

Except we do know.

A debt for equity is coming.

Only question is price and %%% that Equity holders are left with post dilution.

Company RNS'es have been crystal clear in this regard.

[armbar] 09/7/2024 15:00

I do not disagree Gecko, there is value , in country value to Uae, 2GW wind systems built in Uae, TenneT contract, feed studies, resource and skills 9000 employees , first of its kind hydrogen, carbon capture projects and solutions, alignment to Andoc is interesting but Halliburton , Schlumberger , Saipem , Adnoc et al could quite easily acquire themQuestion is do they all wait and compete post restructure or is there a first mover pre advantage ? If interested you would complete the due diligence if you have time , or ask for more time.....Lets see , none of us know at this moment in time GL

[geckotheglorious] 09/7/2024 14:39

Armbar

All those companies listed will see value in Petrofac yes, but only after the balance sheet has been cleared up and the debt reduced massively(and shareholders wiped out essentially by massive dilution)

[armbar] 09/7/2024 14:17

Well let us see if Adnoc Masdar, Halliburton, Schlumberger , Saipem, Technip , Private Equity et al see any WORTH in PetrofacI did not say they were comparable, worth can we used as an adjective or noun btw so no confusion my endATB

[armbar] 09/7/2024 14:03

I think Petrofac is about to get a little more exciting in my humble opinion

[jaknife] 09/7/2024 14:00

Armbar,

You are confusing your “worths”.

Adnoc plan to raise up to $3bn to buy into or acquire assets.

Separately PFC have won contracts that are expected to generate revenues worth circa $8bn.

The two are not comparable!

JakNife

[armbar] 09/7/2024 13:49

Interesting the recent Masdar Adnoc green bond 750M , the synergies with renewables, the plan to raise upto 3bn to buy into or acquire assets in this space, Now Petrofac have Tennet worth circa $8bn to Petrofac, PFC involved in Seagreen, plus Neptune and the European feed study requirements , This could be used by the way before the doomsayers come out to acquire stakes in certain , assets or companies. Now that non controlling stake discussion which differs from a D4E ...

[michaelsadvfn] 08/7/2024 09:53

Forward created his account in 2001, me in 2007.

Just you continue behaving like a 10-year-old if it makes you feel you've achieved something. Cretin.

[michaelsadvfn] 08/7/2024 07:35

You are a childish prat. Fact.

You could do something useful with your life but choose to post irrelevant childish nonsense. Grow up!