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https://news.sky.com/story/petrofac-in-180m-cash-call-to-fund-sfo-bribery-settlement-12444559
I cannot believe the fund raise is at only 120p! That’s less than the price before the SFO court case verdict.
so 150m new shares @120. would probably be a placing & soaked up by IIs. Bit crappy but i suppose was on the cards!
If that's the case, what's that going to mean for us?
Personally i'd just hope they get it done & dusted so the company can move on from all this uncertainty & nonsense. This would only knock the SP temporarliy. No big deal if you're happy to hold here!
Yes, the institutions will be quick to grab them at that price. And to think 200p a share was being forecasted !!
JG, if it's an II placing 150m shares @120 it means there would now be 495m shares in circulation with market cap increased by £180m. Short term the market usually reacts badly. I'd expect this to drop tomoz to about 140 but in the coming days would settle down. Who knows?
will be some panic selling first thing i'd imagine. Always a bad move. This news was always on the cards & was what was holding things back i suppose!
Yeah look at easyjet recent right issue, the sp got knocked on the announcement then rose to about 700 with a few weeks only to fall back now because of travel sentiment.
My guess is it will fall on the announcement, and then recover quickly especially as other borrowing facilities being arranged to fund future growth opportunities
Plus it will completely draw a line under the financial uncertainty and SFO.
almost always the case JG. panic drop on announcement. Then settles down. happened with IAG, RR etc last year. It's not as bad as some will like investors to think. In the end if they need the cash, they have to do it!
Paddyboy
Easyjet were 660 day before it was announced 8th sept ,596 the next day it was announced, and then 709 on 27th the day before x rights and then 684 the day of x rights, so all in all it was positive for existing shareholders.
My average is 135, I didn't sell at 200 so there's no way I'm panic selling.
I would place a wager that there is probably good news to accompany this announcement, and the sp is over 200 by end of Nov!!!
It’s a relatively small discount at 25% - that’s a good thing
Discounted shares should be offered to all existing shareholders likely as of 25th Oct 21 - today.
You should also be be able to sell the right to buy at the discounted rate.
i doubt this will be a rights issue. More likely an institutional placing which will probably be done & dusted tomorrow.
this would have been discussed for a long time behind the scenes probably explains the delay in results etc. If the BoD have got agreement from large shareholders to underwrite a full 150m share placing @120 that is what will happen. There will only be a RI if they cannot get the full amount underwritten from within!
With a rights issue the sp is recalibrate accordingly, how does it work with an equity raise.
After all there will be ballpark 150 million more shares in circulation at say 120 ?
JG so if they did a straight placing tomorrow. Based on today's close price of 158. So tomorrow you would then have 495m share in circulation. Mkt capitalisation increased £548m + £180m. So £728m new market cap / 495m= 1.47 new SP
Correct although it could be argued the company would now be worth more as fully capitalised.
Less risk.
Paddyboy
I just went on to my lloyds share dealing account to set a trade plan just to see what the indicative sp would be for tomorrow and they're indicative sp is 184 ???
Seems odd doesn't it.
Usually with this account it is around the closing sp of the previous session.
This is a placing and is almost certainly done and dusted already. Expect a small drop tomorrow.
i agree Rackson. I've seen no mention of RI in any of the articles. Placing done tomorrow i would believe it to be
It’s clear its a rights issue.
(Alliance News) - Petrofac Ltd will go cap in hands to shareholders, as the provider of services to the oil and gas industry eyes raising funds to go towards a paying a UK Serious Fraud Office fine for bribery offences, Sky News reported on Monday.
& theoretically shouldn't really hit the price too hard given that it would clear up all the uncertainty. The shorters will of course use it to try to tank the SP. Anyone holding long term this is of very little concern at all!