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The bonds are senior debt for Gawds Sake. If they are forced to take a haircut then equity is toast.
This is really really simple! Frightening that you don’t understand
Exactly, the lenders won't want equity, their business is lending money and charging interest. The likelihood is that the debt will be rolled over at fairly high interest rates, possibly with some further equity being issued to select large shareholders at a bargain price, and hopefully good progress will also be made raising funds through asset sales.
The bonds are now junk. If the company folds they are less than junk. The RCF/TL will be renegotiated. D4E is more of a threat to the lenders than shareholders, it’s take a huge stake in the business or renegotiate and give us some liquidity while you’re at it so we can guarantee all this extra business we have here. If Petrofac is a genuine going concern the lenders will agree something. There may be a symbolic D4E to save face but that will be it . The bonds will stay junk for a few more years until Petrofac is profitable and the share price hoes up. Hedge funds know what they are doing and if they are slowly closing shorts at 25 they know it’s not going to 5. More like 50. Pari passi is a catchall phrase and not all debt or security is created equal by any means.
Contrarian Investing: Buy When There's Blood in the Streets!
BP still believes in Petrofac, Blood in the streets! Worth a shot!!!
Thats very old news
They haven't announced this, hoping its tomorrow if they go off past form. so we get a steer of the balancesheet and cost cutting picture.
Sorry that appeared in recent search. Thought it was new
2022?
Surely whoever lobs some new money into the company, be it by D4E, takeover or whatever, surely the amount of money that is needed is going to give the incoming party a say in what happens going forward, a say in whether the exisiting management continues, a say in whether they bring their own people in to steer the ship in some way.
Perhaps these questions are occupying the mind of some of the BOD as much as doing what is needed for the company.
PFC said
‘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’
This is clearly top of the list insomuch as they are now trying to agree a deal with debt holders. It’s the first time they have spelt out a D4E
Helikon Investments Limited 2.40% -0.20% 22 Apr 2024
Tages Capital Llp 0.69% -0.01% 22 Apr 2024
Astaris Capital Management Llp 2.53% -0.10% 16 Apr 2024
All three shorters close thier shorted shares so it mean they smell something more positive than suppose to D4E . There are very long way to bring down 10 % shorted share so everyday afternoon it will up . Letting they find the way out this first.
You said 4p , 20p do you think shorters letting this by paying 25 p for what? why they are closing now than wait for final pump out RNS on how they handled it.
Sorry but I may have missed it but I can’t see anywhere in the RNS where Petrofac have said a D4E is the most likely outcome. I think they said all options were under consideration.
With regard to the bull case then I suppose a takeover is a possibility with more than 25p on offer. Also I suppose I’m finding it difficult to understand why the share price remains around 25p if this downside you suggest actually happens. Surely if the market believes that then it would have already priced it in?
There are two simple facts
1. PFC have said that the most likely outcome is a significant D4E at an unknown price/level of dilution.
2. This means a large stock overhang as BH’s dump their equity for restructuring.
So potentially disastrous downside if a low exchange price but any upside will be severely stymied by BH ‘s selling.
Where’s the risk reward? Explain the Bull case.
Why are you worry about share price down on D4E? Are you CEO of company and set out its price on D4E ? What is number you put out base on? Yes you know nothing than peoples and shorters nothing too . That is why all gamble on and if so good on that D4E why do shorters exit now?
Does anyone know the results date apart from end April?
Just checked website and there is nothing yet
https://www.petrofac.com/investors/results-and-presentations/
2024 it was the last Thursday of April.
PC writing in CAPS now, he/she must be getting worried.
GLA
Would love to see that Kepler report. Seen the analyst who wrote it. Looks about 12. . . .
Red
The RCF/TL are effectively senior to the Bonds because time advantage. Half the $260m is due for repayment by the end of this month. I assumed this would give them an edge in the restructuring but Kepler say that they understand that ALL debt is subject to the D4E.
I suppose because Bondholders can always force a default (and pari passu) by not agreeing to the deal unless other debt holders takes their share of haircuts.
@PaulCurtis
All debt being ranked “Pari passu” is in the event of the company failing.
Not when debt is restructured.
That is quite a basic error you’ve made.
Interesting merger/buyout
https://www.energyvoice.com/oilandgas/north-sea/552230/eni-ithaca-energy-uk/?utm_source=linkedin
Lots of acquisitions/mergers/buyouts occurring at the moment. Petro will be on someone's radar, that's a given. I just wonder if that's what's creating some lag in getting the Debt/finances resolved? For we know that these deals can take months to negotiate etc
Red
All debt is pari passu!!!
I’m just stating the obvious. PFC have said that the most likely outcome is a SIGNIFICANT D4E. There will clearly be an equity cash raise as well.
Do the maths!
And the stock overhang afterwards? Who’s going to buy the $100m’s of shares that debt holders don’t want?
Sounds like they wish to be able to lend your shares to shorters......i know what i would say but you go with your conscience
More shorts closing, share price going up and just monitoring the bond price for recovery. Shorters face unlimted losses if there is a takeover or explosive RNS announcing debt resolution.
Know which boat i'd prefer to be in. 🔥🔥👍
Yes it was @Omars