Member Info for Cuban_Cigar

PFCvetran - QUADRUPLE (4 TIMES) the employees of Petrofac (35000 vs 8500). As you were used to work for PFC (?) , do you know the size of PFC pension deficit ? The reason for this question is no one came to the rescue if Carillion because of its massive pension deficit (£1.8B)

A strategic review normally takes 3-4 months, though sometimes it can take as long as a year. The length of time often depends on the complexity of the company. IMHO, we will have a plan by the end of Apr or earlier as PFC kicked off the review on 4th Dec 23.

Shahz - On top of debts to the banks, PFC also owed monies to trade creditors.

Sharz - Remember PFC have subsidiaries in other countries. If one or more of them made profits then they would have to pay local taxes !

PFCVetran– Agreed and the writer of the article mentioned about Carillion but he did not mention no one came to the rescue of Carillion because of its enormous pension deficit(£1.8B) on top of £3B debt and to my best knowledge PFC does not have such pension liability.

Eurofil - Just asking. What is the problem? If you do the research and/ or have been convinced by with good evidence from others and found none of them then buy more or hold, otherwise sell. Is that too complicated for you ? :)

Re - Carillion , Frank Field MP, Chair of the Commons Work and Pensions Committee, said:

"It is clear that the directors of this company trampled over the rights of their tens of thousands of pension scheme members. Their main focus was paying out fat dividends and bonuses that exceeded their cashflow, all the while stiffing their suppliers, borrowing mega sums of money, and allowing their liabilities and pension deficit to balloon to ruinous levels. Clear warning signs were evident several years ago in the assessments of the company's commitment to its pension schemes. Yet as late as 2015 Richard Adam, one of the directors appearing before us tomorrow, gave a farcically optimistic report to the pension trustees"

It takes between 6 months to year to acquire a company and there are different ways to do it. The process might have been started and we only know when PFC announces they have received an offer.

!but why should it be that high?” The majority of the newly awarded contracts are from the renewable sector which have better profit margin(10% +) The bid price will be mainly based on the forecast EBIT of the estimated total revenue of $12B between Dec 24 to Dec 26 and a multiplication factor between 3 and 6. As PFC is in distress , 3 is used to calculate the value of PFC = > $3.6B. The bidder would play safe to cover any miscalculations or PFC hidden debts/ problems (which might surface after the takeover) by dividing $3.6B/ 2 =$1.8B That's where the range of S1.5 to $2B comes from.

“A big company with deep pockets will play hard ball “ if they are the only bidder. Remember most of the time, buying a company at a right price with minimum risks for its future earnings not its past

Sandancer - How much is a high offer ? low ball offer ? 552 m shares in circulation , if you buy 5% (28m shares) @ 25p /share which will cost you ~£7m. Do you think BOD will take any notice or change their strategy / plan? If lots of bonds have snapped at at less than half face value, its means the buyers have the confidence that PFC will emerge from distress as a viable firm otherwise they would not touch it.

Just looking at Halliburton’ 23 finance: $23B revenue, Gross profit margin ~ 19%, net profit $2.6B vs PFC : 2.6B revenue , Gross profit margin ~ -5% and $340M loss + $850M debt ($250M to be paid by Oct 24 , $600M to be paid by Nov 2026). However, PFC has an order book of $8B+. It is no brainer for Halliburton to takeover PFC at the cost of $1.5- 2B then parachute their people into PFC to turn it around by improving its margins then keep all the profits (and future contracts) for themselves after 2 two years.

In the past (between 2011 -2017), US oilfield services giants Amec ,Schlumberger and Halliburton were understood to be among the firms circling Petrofac. Will the history repeat again ? Any ideas ?

Bearhunter - "the enterprise value of VENTERRA GROUP PLC at £210.7m based on a Turnover of £97.1m and 2.17x industry multiple "

Bearhunter - "the enterprise value of VENTERRA GROUP PLC at £210.7m based on a Turnover of £97.1m and 2.17x industry multiple "

Bearhunter - I have doubted very much AA put his entire fortune into Petrofac basket. Also his newly created company -Venterra Group Plc ( Serving Offshore Wind Industry, the same industry which Petrofac is heading to) is doing quite well and it could be partially used to bail out PFC. Time will tell.

PaulCurtis - "PFC need one investor with deep pockets and a significant existing equity holding to protect. But is there such a beast?" I will not be surprised at all if Ayman Asfari - the billionaire and the founder of Petrofac and the current Petrofac Non Executive director is one of the white knights." "PFC need one investor with deep pockets and a significant existing equity holding to protect. But is there such a beast?" I will not be surprised at all if Ayman Asfari - the billionaire and the founder of Petrofac and the current Petrofac Non Executive director is one of the white knights.

"the Group continues to make good progress with contracts awarded in 2023, which increased the backlog of the Group to over US$8 billion.

It is also making good progress in closing out its legacy portfolio and unwinding historical working capital. It has continued to maintain liquidity above its financial covenant and will provide further details on its operational and financial performance within the Full Year Results announcement in April”

PLUS No contract cancellation, no further warning about EBIT or additional debt, CEO and/ or financial director did not leave with immediate effect.

= > Good enough for me to hold.

Based on last year announcement, we would know exactly the full year 2023 date by Wed 28th Feb. https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=4248000&lang=en-GB&companycode=uk-pfc&v=

And the motive ? In order to have EOY/ Xmas bonus then find another job in Q1/24 :)

Just look at historical data, the highest number of the won contracts are in the first three months of any given year. Therefore, the BOD forecast value of the order book – $8B by end of Mar 24 is reasonable, as till 20th Dec 23 the new order intake =$6.8B and we should not be surprised to see few announcements from PFC in the coming days to confirm this.