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For what it’s worth, I sold the lot at 25p. I’ve held for 4 years, averaging down all the way, but my gut feeling is that shareholders are going to be wiped out here. I still plan on buying back in at the fraction of what the sp is now whenever the dust settled. I hope for those that are locked in that I’m wrong, but even the RNS seemed to be screaming, get out while you can.
Debt holders can take 'the biscuit', perhaps a larger chunk of the buisness from shareholders, that is a probability Paul, we dont know what deals are being struck or T&C's... However as some of the shareholders are also employees through share schemes / remuneration packages, this may leave a bitter taste in some mouths, and if those such people are essentially the cooks in the kitchen, I'd get ready for some sh*tty meals being made afterwards.
A deal may be struck to the benifit of debt holders, but if it's at the complete detriment of their own employees (and share holders), I can't say its the best foundation for a strong buisness going forward - regardless of the attractive backlog. A sort of capitalists poison.
My bets are on a good outcome for both shareholders and debt holders, for the scenario you have described with debt holders taking everything does not sit well with me. Should the debt holders make unfavourable terms, may they reap what they sow. Remembering that petrofac is a 'people buisness'.
IG
You seem to have forgotten that you were the idiot ramping up the equity when it was c.25p!!!
And you are too dumb to realise that debt holders now effectively own the business. A business that you were happily valuing at over $1bn EV only six weeks ago
Clearly there is risk over obtaining the PG’s but should be doable. Debtholders may have to take haircuts and/or convert all debt to equity worst case but this crisis is about too much debt so resolvable.
One of the problems that PFC will face is that its entire supply chain will re-evaluate their payment terms and try to drag payments forward, or where new work is being placed negotiate more onerous terms (for PFC).
This will go right down to, or perhaps even start with, suppliers at the bottom of the chain, some may even demand payment before releasing anything, irrespective of contractual terms.
Projects could grind to a halt.
Afterall would you want to give PFC credit that could cause you difficulty, or even kill your company, if you didn't get paid?
Those that throw stones using personal insults demonstrate their immaturity and foolishness, I don’t suffer fools gladly so post reported and hopefully a ban will follow.
IG
‘That answer makes you pretty thick as well as wrong. Mindlessly ramping bonds and shares in Petrofac is definitely unintelligent at this time. The fact is that the company is today technically worthless and insolvent’
LOL!
PFC is only insolvent because it can’t pay its Debt holders but debt holders have now given them a period of grace to sort out the debt position. Hence PFC is not currently insolvent! The Debt holders are pulling the strings and the impending D4E led restructuring will remove this insolvency risk. Debt holders may be forced to take haircuts as well, the bond price is implying this. New restructured PFC could look very solid if most of the debt has gone, $300m of new cash, $200m of performance guarantees, the non core sale proceeds and possibly the Thai $130m or part of it
What don’t you understand about that!!!
Directors who have shares (through remuneration package or not) will also be subjected to any D4E terms.
I take a little bit of satisfaction from this...
If we go down in this plane, I'm glad they have no parachute.
Hoping for the best outcome here for all parties.
In answer to the question as IG will not admit he bottled it an sold out before the suspension, when others are fearful is the simple answer from me, best of luck to all genuine holders and don’t listen to the boiler room antics of some low life posting on here.
If it was worth the value of the debt the secured lenders would not be doing what they are doing and would wind it up. It was a good buy six weeks ago and will be again. But today it is literally worthless as the shares cannot be traded, they are about to default, the bonds are junk and the “security” is valued at about 0-10% of the actual debt. See? The only upside for anyone is that they are still trading and are a fundamentally sound business saddled with huge paper debt that seems to be secured on fresh air, hope and an order book of uncertain value as regards profit. That’s why. Worth a punt though, eh?
IG
Can you please explain how you have gone from thinking PFC a great buy only six weeks ago, despite $850m of debt, to worthless now when all that debt can all be switched into equity?
PC
It is not my fault you are stuffed and holding junk bonds secured on a Hail Mary of “pari passu” worthless security. Maybe if you stopped ramping worthless junk bonds and considered matters objectively you would not be so angry that you are skint. Your predictions are 100% wrong, every time. You quote non existent sources and seem to believe that if you keep spouting nonsense it will, like magic, come true!
When someone like me tells it how it is you can only resort to insults.
You were sold a pup and now you’re stuffed.
Tough.
It didn’t work out, equity got stuffed.
You do realise they immediately afterwards they did a 100 to 1 share consolidation so that current share price is c. 1p old money. From memory the shares were 10 times higher immediately before this restructuring
Glad they've finally been forced to confront the issue properly, presumably the auditors won't sign it off as a going concern until the liquidity is sorted out. Hopefully for those of us still holding there will be a quick resolution that allows the company to move forward on a sound footing.
Eurofil, GKP did a D4E in 2016 but their current shareholders at that time lost 95% through dilution.
https://www.investorschronicle.co.uk/2016/07/14/shares/news-and-analysis/gulf-keystone-shareholders-lose-their-shirt-as-bondholders-hoover-up-equity-zSNJbgsvvUjjKQGQpY2w8O/article.html
He does not understand bonds by the looks of it so there is no point in arguing with him.If anyone wanted to take a position he/she should have waited until refinancing.
Gulf keystone did a similar raise D4E in 2016, it worked out for them and I’m confident it will work out fine here, please check below history:-
13 October 2016
Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone", "GKP", or "the Company")
US$250,000,000 13.0 per cent. Guaranteed Notes due 2017 (ISINs: Regulation S XS1056559245, Rule 144A XS1056559088) (the "Guaranteed Notes")
and
US$325,000,000 6.25 per cent. Convertible Bonds due 2017 (ISIN: XS0841237497, Common Code: 084123749) (the "Convertible Bonds")
Completion of Balance Sheet Restructuring
Gulf Keystone is pleased to announce that the Scheme of Arrangement (the "Scheme") in connection with the Balance Sheet Restructuring Transaction (the "Restructuring") announced on 14 July 2016 became effective today. The expected settlement date for the Scheme is 14 October 2016
Restructuring
The Restructuring involves the implementation of a new capital structure to materially strengthen the Company's balance sheet with a significant debt reduction from over US$600 million to US$100 million through the conversion of over US$500 million of existing debt into equity of the Company by way of the Scheme.
IG
You truly are completely clueless. Only six weeks ago you were claiming that PFC a raging buy, now you are idiotically claiming that the senior debt is worthless.
Are you incapable of understanding that the debt holders will simply take control of the existing business. They are the only debt. They will pump in $300m of cash so combined with D4E (and dramatically reduced finance costs) it could be a great business.
Do you not like pasta?
Ivor, don't disrespect my Comrade Baron. This is your last warning.
Asfari is still our main weapon in finding a way out. That and ME connections.
His shares have lost on £100million in the last two years at current market price. I repeat £100million.
Thus there is huge incentive to find a way to salvage share price from inside the BOD.
I still look at tullow who managed to secure $2b in debt in a huge restructuring.
A third of that from a ME guardian angel would see PFC moving forward.
The SP decline has been (justifiably?) amplified by the shorts, the BOD need to step up now and the pressure for the performance guarantees will help them focus hopefully and put us in a better place moving forward. That said our chair Medori has been on the board since 2012 and look what has happened during his tenure. He needs to fall on his sword as soon as things are crystallised.
Kept my money in.
Bonds have already lost 85% value, so at the mintue market believes that bondholders wont get their money back.However if fresh money is injected and buisness improve than probability of them getting their money back increases.However bonds tell that equity is worthless.
Some are ramping the bonds. Even suggesting that the additional credit will be secured with some sort of super seniority. Absolute nonsense. There is no security worth a carrot as it has all been pledged already. The bonds will not increase by three or four times. Far more likely they will lose 90-100%. The only real hope for the junk bond holders is time or a takeover. Two or three years of profitable trading and maybe you recover 20 or 30%.
DO NOT BUY BONDS THEY ARE JUNK!!!
Superdry , Cineworld, McColls, COPL , Bahamas petroleum …. It’s a disease on many share discussion groups
BloodyRedFackwit
DYOR incel
Petropasta