The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Hopeful this week we can get a line drawn under what is happening with debt. Too vague too uncertain currently. May will be a different month a positive one imho
Tuan6: The directors did not buy shares. The company bought for them, as part of their remuneration deal(s). Check the wording of the document.
Sure, it gives them more skin in the game by having them, but not the same thing as a 'proper' inside buy from their own pockets.
None of which means I am advocating you make a decision either way here, but I read your post and wanted to just clarify it.
Tough credit market. Clearly the potential lenders have the company over a barrel here.
Nevertheless, the BOD need to get this cloud of uncertainty lifted.
Although the SP action the past few days suggests the market does seem confident that a deal not much worse than the current SP, will be done. So who knows?
You longs could be well rewarded for your bravery. No thanks to the BOD, IMO.
Simplyme, i disagree that the price would drop as much and my rationale behind this is that the company is already valued with the debt in play and the uncertainty. you take this away with the backlog then i would argue that the business is worth more than the current suppressed value. Only my opinion though.
Still holding, only just.
Rationality says sell, with contract backlog reason says hold but not looking good at all…
Hi Badvoc, you have to also add the value added to the company/ reduced debt etc. If shares get diluted 10 to 1 but raise 600m (15p a share) this has to be added to the value of the company. Hence new company might have 4.5bn shares instead of the current 520m (with value of 120m) but would be valued at say 0.7bn which means the shares fall from current 23p to only 15p. Very rough but gives a picture of the impact but is a going concern with 8bn backlog.
Thanks, Readheadedanger - So if I have shares worth £100k now and the shares get diluted by 10 to 1, I'll be worth £10k. then they may rise but will need to be the equivalent of £10.00 (new £1.00) to be the same value? could take years.
Sorry seriously questioning if to bail and take a £142k hit or hanging there (but if I have to wait years to get money back it could be worth just bailing and making up elsewhere). This BOD has seriously f**k PI's over and hand private equity control
@Badvoc - it’s not a debt issue per se - they have no issues servicing the debt. It’s a short term cash flow issue to stump up for the guarantees (that have been dramatically increased post winning the contracts - some would argue a little unfairly).
Different issues. Shareholders will not be wiped out. Equity will be diluted. But not wiped out.
Wasn't it contract renumerations? Not buys.
Petrofac’s shareholders have to accept that they are on the edge of wipe-out. The company has an US$8 billion backlog of contracts, but without a resolution of its debt issues, customers may well shy away, as McDermott’s own customers did in 2023.
https://www.bairdmaritime.com/work-boat-world/offshore-world/column-on-the-edge-mcdermott-petrofac-the-metals-company-and-cadeler-offshore-accounts/
Just week ago directors bought this share at 26p so if something really bad on debt and company cant pay it why did they buy on thier owe money? A lot directors never buy if they sense thuer comoany cant cope with debt and gone but this case difference so thier money on 26p we can safe buy at 22p and let this show run along .
You can see from the few trades we’ve had this morning that the shorts appear to be reducing - is it Helikon?
Yup looks that way, so many false claims on the internet. It’s written to look like her’s but like most say probably isn’t….
Just searching for some positive I suppose but can’t find any.
That's why I only included the bottom part from Malcy's blog bc it's not her words.
Quoted on Petrocfacs website as hers (albiet limited and removed the bottom part)
https://www.petrofac.com/media/news/petrofac-supporting-national-oil-company-of-equatorial-guinea/#:~:text=Teresa%20Isabel%20Nnang%20Avomo%2C%20Director,grow%20our%20partnership%20with%20Petrofac.
@Badvoc - This is a good contract for Petrofac and adds neatly to the portfolio but it isn’t going to make huge addition to the order book nor the problems the company has elsewhere in the business. I am well documented as being positive on Petrofac for the long haul but they need much more than this to move the dial, or the share price for that matter”
This is not a quote from Teresa Isabel Nnang Avomo, Director General of GEPetrol but a quote from Malcy, Malcy's blog.
Found this ... seems their customers know of PFC issues, but still chose to sign a deal with them....... This a good indication of faith or bad due-diligence. This is from the recent National Oil Company of Equatorial Guinea, contract last week.
Summary of comments:
“This is a good contract for Petrofac and adds neatly to the portfolio but it isn’t going to make huge addition to the order book nor the problems the company has elsewhere in the business.
I am well documented as being positive on Petrofac for the long haul but they need much more than this to move the dial, or the share price for that matter…
Full Comment
Teresa Isabel Nnang Avomo, Director General of GEPetrol commented
““Today’s contract signing marks a key milestone in our journey to becoming Operator of Block B on 1 June 2024.
“We are excited to grow our partnership with Petrofac. By unlocking the huge potential of our indigenous national workforce, we will build with Petrofac’s assistance, an organisation for the long-term management and development of our country’s oil and gas assets.”
This is a good contract for Petrofac and adds neatly to the portfolio but it isn’t going to make huge addition to the order book nor the problems the company has elsewhere in the business. I am well documented as being positive on Petrofac for the long haul but they need much more than this to move the dial, or the share price for that matter”
Source: https://www.malcysblog.com/2024/04/oil-price-challenger-petrofac-i3-and-finally/?_gl=1*wf4dk1*_up*MQ..*_ga*NTg5OTA4NDU1LjE3MTM1MjA0Nzc.*_ga_7W1EBHDKV6*MTcxMzUyMDQ3NC4xLjAuMTcxMzUyMDQ3NC4wLjAuMA..
Tales of the unexpected
Not sure if they can wait for months. These performance guarantees are to be in place for company going forward. Also this is a tool that bod/management is using to hammer PIs.
Current holders at the end of a couple of spirals will only hold 20% of the company if lucky(58% as of now)
Debt will explain the story and If it is still going up no point keeping it.
Financial reports - expect the unexpected
Several on here seem to think that next week or so all will be revealed? Only the year end results are scheduled and these are some 6-8 weeks behind what they used to be (2020 was 25th Feb, 2021 – 24th Feb, 2022 – 15th Mar, 2023 – 27th April), last time they were this late last year, was bad news, omen for this year?? (we already know there will be a massive loss but just how much).
Any update on financial funding etc. isn’t a given, that could go on for several months longer. Updates on contracts, yes agree with others here that PFC love to wrap good news with bad, so could be some contract win news.
Good luck to LTH for the year financial results impact on an already extremely weak share price, least before PFC issued that self-destroying RNS it had gains some slaughter space (33p).
Interesting read: https://commonslibrary.parliament.uk/carillion-collapse-what-went-wrong/
Similar time line for continual loses and still wining contracts
And no I’m not shorter, now some £135k down and considering bolting early next week as this is very risky.
@DanCUK
I was the same, just I had RR on 80p, sold not much higher unfortunately. However I’m not rushing away from here. No doubt, the risk here is higher then RR for sure. However I still believe the order book and backlog. They won’t leave a company with this much future contract to go bankrupt. Many times I’m hesitating, particularly during this week, but I still believe brighter days will come, when all LTH’s will be happy for didn’t sell at the deepest point.
God bless all LTH’s and give PFC a quick recovery and healthy future in business.
Low volume today, looks like shorts didn’t close any position.
If the whole business was taken apart and sold, could pfc pay off all its creditors? Presumably the whole bill would be under a billion, with anything over going to shareholders. It has a reasonable amount of cash to offset this, and parts of the business could be sold as a going concern, so I think as shareholders we would still get something from a well-managed liquidation, probably more than the current share value.
I haven’t a clue how “BBC” got into that text 🤷♂️
Hi Pokerchips, always respect your views and read your posts intently.
I posted something similar to BBC what Shahz said, a couple of months back. You also have a very similar reply, although I’m still unsure the validity of that argument.
If the company came out, when the SP was oscillating around 70 / 80p with honesty along with notifying the market of newly awarded contracts, that things were looking shakey in the short term and they needed a raise to bridge the gap till all fell in place, surely they could have raised then, thus eliminating the perilous situation the company is now in??
Surely the company have allowed the SP to crater, while doing nothing knowing there was a black hole to fill. Thus allowing the short attack in the mean time to exacerbate the situation?
It does stink a little doing nothing, knowing they were heading for the ditch right in front of them