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PC
The debt has increased significantly. The security for this is the company. If it goes pop everything vests in the bankruptcy trustee other than debts secured on company assets. To swop this much larger debt for equity means the lenders value the assets of the business - which are securing the debt - at more than the debt. Obviously the majority of the bonds are junk status now. But the new money will not be secured by junk. The lenders will sell junior bondholders down the swanny as well as the shareholders. The new money would not have been made available unless the lenders were 100% certain they will get it all back with interest at no cost. This means they believe there is a future for the company. They will accept shares for debt but the idea these will be dumped is wrongheaded. The shares are not being suspended for nothing. It is not as black and white as you suggest. But high risk for sure. I disagree the price will drop to 3 or 4. The business is sound save for the debt which was caused by historic failures. It’s worth a pint as a long term high risk potentially high return share. You pay your money and take your choice.
Agree - there is bound to be suitors circling. It’s going to be an exiting wait now for the month of May. Looking forward for the update on 31st.
Snapper - Maybe 3rd time lucky for Halliburton but this time round they only need to pay a fraction of £25, you never know !
We'll theres stupid......
Tells you something about PFC
Snapper - Halliburton have known PFC well. In fact, Halliburton did look into taking over PFC twice in the past (2012, 2017). https://www.thisismoney.co.uk/money/markets/article-2246062/MARKET-REPORT-Petrofac-gushes-talk-bid.html.
Snapper assume u have a holding here based on the number of posts you are making? Or have you an open short position?
Ur clearly passionate about posting here on urging people to sell. One does ponder your intentions?
Halliburton are a oilfield service provider and major service provider for US Government...
PFC PFC undertake 90% of there revenue on EPC contracts.....
Gary - Halliburton’ finance: $23B revenue, Gross profit margin ~ +19%, net profit $2.6B vs PFC : 2.6B revenue , Gross profit margin ~ minus 5% and $340M loss in 22. PFC BOD have to improve the margin significantly. If not, they have no future.
Gary
Contractors will only work for PFC on a cash positive position....
But that aint going to happen......
That ship sailed.....
The accounts show losses....
On EPC contracting 10percent profits aint there....
10% sounds a massive challenge.
I work in Construction and the industry average is 2.5 to 3 %.
They will have issues with suppliers and payments now for a further challenge
Snapper10 - "Wheres this 10% margin going to come from..... ?" That's is the challenging job which PFC BOD have to show/prove to the lenders not mine !
10% Margins
PFC currently lose at least 15 to 30% on average on Historical contracts.....
Wheres this 10% margin going to come from......
PC - The debt holders will only want out if they see no decent profit/ return for them to stay in. If PFC can prove with good evidence that they have 10%+ margin on the recently won contracts then they will not dump the diluted shares .
The terms state PFC need to get Performance and Advance PaymentBonds in place to even get Agreement.....
They have been trying to obtain these Bonds for months....
If you're Bonds History is bad
Seriously think this is about to change.....
Maybe read the RNS properly would help
IG
It is b/w and the BoD have no choice but to accept debt holders terms if there is no alternative solution. This much is blindingly obvious. The debt holders will stuff equity. Why won’t they?
Is there an alternative solution? No reference to this today. No one is going to buy PFC today when they can buy an around half the EV post restructuring, when debt holders will be by far the largest shareholders and want out.
Cuban_cigar
I agree. They would pull the plug on a default if they thought they would not get paid. This not a short term share though. Once the debt is resolved they will trade through and recover.
Ivorgriffiths - The creditors/ lenders are not charity workers, they must have seen and examined the book, provisional Q1/24 trading status and cashflow forecast till Q4/24 at least, and comfortable with the progress of non core asset sale, before offering to provide $300million (£239million) in fresh credit to keep PFC, otherwise they would pull the plug by now.
The creditors had no option other than to provide liquidity or Petrofac go pop. What they want and what they get are two very different things. The “secured” debt is secured on the company. The company is technically insolvent and so the debt is unsecured. Even if there is a D4E it does not mean that the creditors can dump them the next day. They may give them options, they may have to sit on the shares until they hit a given level, they may have to keep them for six months, a year whatever. It’s not as straightforward as you are suggesting. Short term - 6 to 18 months may see lower prices but not necessarily. The fact it is not a done deal is informative, they are talking about guarantees for contracts and the Algerian angle reported in meed is intriguing as well as the asset sale and chasing cash in Thailand. As you have previously suggested the underlying business is sound and the same business was once worth ten times what it is now. It will be again once the business is stabilised. I always looked on my investment as being longterm with the caveat a takeover may happen. I think anyone looking for a quick profit should look elsewhere. The BOD do not want there own shares to be worthless after all. And no one wants to wind the business ip so there is much to negotiate and it is not as black and white as you suggest. Of course DYOR.
‘ Paul I get it what you are saying, but if some investors here are 70 to 80% down. What difference it would make losing another 10 to 15%, in the hope that company turn things around. I m lucky, as my avg is 22P.’
You are like the Black Knight in Monty Python’s Holly Grail ‘Tis only a flesh wound’ as his various limbs are hacked off!
Today’s update screams that a cheap incredibly dilutive D4E is now pretty much nailed down bar a miracle. The critical point you need to grasp is that it’s the debt holders who are providing the liquidity.
That means current equity is stuffed. Bondholders are being forced to accept new shares that they don’t want. They will obviously dump them which means that short term the shares will trade well below the D4E price.
Debt holders will want a D4E price of 4 to 5p so maybe will trade around 3p.
This is when any predators pounce….
Anyone, tell me where I’m wrong?
Oh heck CheapBoy that’s a full 180 degree turn in a couple of weeks. You just missed the nomination deadline though.
P.S.It’s “you’re”
Your right Paul
It's a huge sell
PFC is pure gamblers share, some will gamble and others will chicken out
It is already horribly diluted. 30% on the day.
Paul I get it what you are saying, but if some investors here are 70 to 80% down. What difference it would make losing another 10 to 15%, in the hope that company turn things around. I m lucky, as my avg is 22P.