George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
PC
Just accept it. Your bonds are junk and you are just trolling talking nonsense. You have no idea what pari passu really is or the fact that in many cases it definitely doesn’t mean what you think. If the company folds no one gets paid apart from mortgagees of real property and even then only if it is worth enough. RCF/TL will be renegotiated because the banks need Petrofac to keep trading to get paid, Petrofac needs liquidity to keep trading so the banks will give them it. But if the order book and new contracts are just chasing turnover they will pull the plug and no one gets paid. D4E? The shares are in the toilet dude. No one wants them or the junk bonds. Given the total lack of any takeover interest the lauded order book may well be pants and you could well be stuffed. That’s the game dude. If you can’t afford to lose don’t play and then cry like a baby girl. And stop trolling.
No one will get any court orders to cover bonds as everything beats in the trustees and junk bond holders are lucky to get next to nothing after employees, the receivers, accountants lawyers, valuers and all the other vultures. No one is going to court over this small change outfit. In a fire-sale it is worth nothing. Certainly not six or seven figures for lawyers to go chasing after worthless paper “security” that is pari passu with dish water.
The bonds are worthless as at the end of the day the security is the company. The company folds the bonds are toilet paper. To convert D4E the creditors own the company. The company is an order book, its personnel and reputation. The banks have to keep it going to get paid and they want fees for arranging facilities. The bond holders have no power in the present scenario. There is no default, the hedge funds are closing their short positions and everything will be fine for LTH of shares. The junk bonds will be shaved to the bone. Tough potatoes that’s business. The only other possibility is a takeover but there is no rumour of that. D4E ppffttt.
The bonds are now junk. If the company folds they are less than junk. The RCF/TL will be renegotiated. D4E is more of a threat to the lenders than shareholders, it’s take a huge stake in the business or renegotiate and give us some liquidity while you’re at it so we can guarantee all this extra business we have here. If Petrofac is a genuine going concern the lenders will agree something. There may be a symbolic D4E to save face but that will be it . The bonds will stay junk for a few more years until Petrofac is profitable and the share price hoes up. Hedge funds know what they are doing and if they are slowly closing shorts at 25 they know it’s not going to 5. More like 50. Pari passi is a catchall phrase and not all debt or security is created equal by any means.
Cuban_cigar
I thought you were talking about share dealing rather than tax returns and CGT.
Hugeprofitby2030
I agree with that. I bought in before the 20th December and was tempted to sell but bought in on the basis it was a three year turnaround with an upside of four or five times investment allowing for restructuring and so on. Recently I have begun to think a takeover is possible, not probable but possible. It is interesting to watch developments as you say but I am off on my jollies so I am going to ignore everything except RNS updates and clock off.
GLA DYOR
They refer to rights issues or share offerings that are available at a discount to existing shareholders.
“dont be ridiculous”
Look in the mirror mate. I guess if you want to be rude you’re good at that but it’s not our fault you’re skint so don’t take it out on everyone else.
It will be a mix of solutions. I agree that once it is done it will improve.
Sorry, I meant you have no idea what the NAV is. The share price is obviously being manipulated.
We have no idea what the NAV is or what the priority is The Fitch downgrade is premises on the idea D4E is a done deal.
Petrofac have to asset strip to pay off debt as well as shave the bondholders and the BOD have to be very careful in the glaringly obvious game they are playing, especially given the criminal back story - which is why they are where they are of course. A mix of solutions is likely and in the medium term will significantly increase the value of the business, but only if the business they are getting is more than chasing turnover. D4E is not enough on its own. But receivership means no one gets paid.
D4E is a red herring. They use it to manipulate the share price. Knowing a share will go up or down 10 or 25% is incredibly valuable. The careful wording and the hedge fund short position timely adjustments scream “insider trading” but nothing anyone can or will do to stop it. The value, provenance and nature of the “non core assets” is what intrigues me. The BOD have a duty to shareholders and in reality they will have to sell stuff before they can rip off the shareholders and bond holders. If your loss is less than £10k and a D4E happens without asset stripping you have a small claim and now risk of a costs order if you lose. If you believe you have a good case - for example the defence to a small claim is crap - it would even be worth risking kicking it up to the fast track so as to force them in disclosure as regards assets and efforts made to sell them. They need to watch themselves as they can be made personally liable, which they know. I think they are trying to shift the PI shares into another vehicle or parties’ hands that are institutional to avoid such risks prior to some form of merger, takeover or a major investment by a hedge fund. In the later case they will want a massive say and board room presence. D4E is risky before asset stripping and probably unlawful. PFCVeteran made a bad move imho. No D4E in my view but DYOR.
Of short positions are closing then they expect a spike. They therefore expect positive news. Of you can get away with market manipulation why not manipulate it? You buy a few shares to push it up a bit. Then crash it and buy a ton of them as the PIs and day traders bottle it. Then sit tight and wait for some totally unexpected good news: an asset sale as well as upfront payments and legacy payments have saved the day but to cap it all there is talk of a takeover or joint venture and a couple of billion in new contracts! I mean, if you can buy 1,000,000 shares for £200k one week and two weeks later flog them for £600,000 who wouldn’t? That RNS served a purpose and that purpose was to make someone a ton of cash.
Paul Curtis is holding junk bonds and his only hope is that there is a D4E to cover his exposure. A takeover would be even worse for bondholders. If they enforce the loans they get nothing because the security will be used to pay the receivers, lawyers and court fees. He is really a shorter and wants a D4E just like them. He is down 75% assuming he didn’t pay a premium for his junk bonds. Shorters closing out will push the share price up and is good not bad. He is ramping bonds in other words.
The BOD would rather survive a D4E than get sacked by a hostile takeover or even a semi friendly one.
13,000,000 traded 23 not bad really. I just cannot see that lenders have anymore faith in the board than me. They release a negative RNS when they did not have to and don’t release one today or when the Algerian contracts were awarded. It seems chaotic. I just hope there is a hostile takeover brewing. If the new owners avoid a dilution and get the business back on track we can at least look forward to slow upward progress and more competent management.
Mind if it hits anywhere above 30 again I am getting the f#%k out of Dodge if there is no progress.
The problem with the order book is that much of it was obtained corruptly by personnel who may have been on a commission. If it is £8 billion profit might be £400-800 million. That’s not enough. What is interesting ate these non core assets. How much are they worth?
The backlog is unlikely to be much more than turnover. The BOD would prefer a D4E to keep their jobs. But a takeover even after a dilution is likely. But it is possible they could stumble on into receivership. Long term a takeover would be preferable as there is a prospect of recovery and it will have a positive effect on the share price. The value of non core assets is the really interesting point and the fact they are or rather might not be securing any debt. What are these assets and how much are they worth?
We do know that the bonds are junk whatever happens.
Don’t buy any bonds in Petrofac and if you have any take the 28% and head for the hills.
They will never be able to settle £900,000,000 of debt with a D4E. The security must be trash for that even to be a realistic option - which it isn’t. The only way out is for the board to resign following either a hostile or friendly takeover. But the bonds are only junk as it stands.
The bonds are effectively and de jure secured on the company as the security offered (if you can call it that) is likely - but not necessarily - owned by the company. Defaulting the debt will result in a wind up and then the bonds are just junk. At the moment they are worth about 25% of what they are “worth” and whilst pari passu principles are bandied about by purveyors of bonds it is a very slippery and definitely variable and relative term. Of course if the “assets” of Petrofac consist mainly of the backlog then there aren’t any easily liquefiable assets at all. The moment there is a default he bonds become worthless and take their chances with the other creditors.
Of course the most important creditors are the Insolvency Practitioners, accountants, lawyers and the Court Service. Their astronomical fees and charges are paid first and in full. Given Petrofac obtained many contracts on the back of bribes the legacy contracts are definitely dubious.
Bond holders will be lucky to get 1-5% of the paper value. Even then they will have to pay their own lawyers to get it so net of those charges they will recoup between 0-1%. That’s why they are holding junk.
Their only hope is a takeover. Even then 25% is all they get. The “other investors” mentioned in the RNS is significant and hints at a takeover of some sort. That is the only real new information.