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Orangemoon
If there is no change in the STF there will be no change to the the TL/RCF and all that will have happened is that the accounts have passed an audit and Petrofac are defaulting, cannot provide guarantees and are bust.
As it stands they are technically trading whilst insolvent.
Takeover is of course unlikely. Unless a rabbit is pulled from a hat in the next two weeks we ate looking at an SP of zero and bonds are not worth the paper they are written on. Sadly, a receivership grows more likely by the day.
1. Petrofac is insolvent.
2. They have not passed an audit.
3. They have defaulted on debt payments.
4. The shares are still suspended.
5. They have made no indication whatsoever that any of this will ever change.
The next step is almost certainly going to be receivership. I an as disappointed as anyone but unless there is a takeover we are all looking at tax losses only. Even if there is a takeover we are down 90-99%.
Yes, I was hopeful but things change. The silence is not golden. The BOD will be looking out for the BOD. The employees and contractors will gradually learn about this. When they don’t get paid or there is a “problem at the bank” is the day it’s over. Sadly, this is inevitable.
Hi yorkshireblues
When you say:
“Utter nonsense sbout staff bailing. Friend who is a senior manager at PFC says its business as normal.”
I have to say I find this hard to believe. Others say nothing has changed. Sorry, it has. Petrofac are defaulting, nothing has been said or done to change that. Fantasy nonsense about shares increasing in value when they are suspended is desperately sad. The company is bust. Game over. The BOD will look to gut the company and start again free of debt. They will fail of course and in the meantime prolong the agony.
Runner2018
“I’m hoping for a re-open around 30-50p”
LMAO: seriously?!!?
I would like that as well, and immortality, but it’s not likely is it?
Silence is not golden. Two weeks and nothing. Default looms, contracts are close to being voided, staff will be panicking and bailing out. Management will be running around like headless chickens. The only hope is a takeover but if all there is left is debt, a hollowed out workforce and sceptical customers looking for an excuse to ditch Petrofac who would want it?
No one. It’s a right off for tax now. Game over. It’s a shame but it’s a fact. Once you accept that you will feel better.
Hi europhil
The fact they have more time to do stuff does not mean they will do it. The urgency is real. My view was and is that they has maybe a week to get sorted or they are bust. My biew is that they are now bust. But, lime I say, miracles happen, aliens might be real and some people might have fairies at the bottom of the garden. But you suddenly levitating is far more likely than Petrofac finding a way back now. Defaulting on debt in business is fatal. Never say never, but not likely now is it?
No news is simply news of death. Two weeks and nothing. They will now default and everyone will drop them like a stone. Sadly the company will be wound up.
Chalking this up as a total loss. Miracles happen and something may turn up but the only real hope has always been a takeover and that seems unlikely. The only assets a service company has are its people and I am guessing they are bailing at pace and all that will be left for creditors is an interest in futile litigation.
Of course they may own a real asset or two so secured creditors might get something between zero and 1%. A tax loss is all we have now I am afraid.
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?
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.
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!!!
BloodyRedFackwit
DYOR incel
Everyone is wrong, why? They know nothing.
Shares will be worthless? No, they are 10 not 3 or 4.
Bond holders are safe? Not likely. Lost 80 -90%.
Creditors are in control? No. The BOD is.
There will never be a takeover? Now THAT is the question.
DYOR. Most of the posts are complete horse. The ones who post the most talk the most horse****!
Unless you actually have inside information it is not insider trading. He could sell. He’s not on the BOD. The report in meed about the Algerian contracts is keeping me from selling. Got a low average as well and can take the loss if I’m wrong. As it stands Petrofac is a going concern with a strong order book, assets to realise and the net additional short term credit is $100 million of credit support. It does seem a given that it is a going concern with a future. The equity will drop more but once the company can focus on trading and profit there is no reason why it cannot return to a market cap of 1 billion in the medium term. Folks buying today are hoping for a takeover but the fact anyone is buying is remarkable. I bought in on a big dip and did so with the view it was a two year punt barring a takeover and expecting a 400% return. I still believe that will happen, barring a takeover of some sort.
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.
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.
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.
It has to be said. There is a possibility that the BOD are so incompetent that the contracts they are sitting on are chasing turnover with zero profit. The lenders will have carried out die diligence but everyone with bonds or shares could lose the lot. Just saying. DYOR.
Cheshirelad
I agree a takeover is more and more likely. Also the Algerian contracts reported by Meed are huge but maybe not quite finalised. The non core asset sale is positive, the fact the lenders see no mileage in a liquidation is positive, a move towards profitability in the short term is positive. The massive new unannounced contracts in Algeria are game changers for Petrofac and the lenders appear to agree. All in all takeover, for what would be small change for a hedge fund, does seem more likely but DYOR as always. Looking ahead a month then sell, six months and bought in sub twenty hold. Looking ahead more than a year buy but DYOR.
When the shares are suspended the short positions cannot close. As there is a small risk that the shares are permanently suspended they are forced to close out over two days pushing up the equity value or at least maintaining it. The D4E is worthless to lenders if the shares are worthless. The company is not technically insolvent but could be wound up overnight if it became de facto and de jure insolvent and creditors made a move but that won’t happen. The D4E will be no where near as bad as is being suggested. A takeover is looking more and more likely but DYOR.