Member Info for ivorgriffiths

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.

A 90% loss on the bonds is hard to bear I guess.

The lenders have no choice other than to help Petrofac trade through the cashflow crunch. During the share trading suspension a deal will be done. The business appears sound and once the debt is shaved a takeover does seem a no brainer for a hedge fund specialising in financially distressed no tech infrastructure businesses especially as Petrofac have a foot in legacy fossil fuel and energy as well as renewable energy. Petrofac have stared the banks down and the lenders blinked. I guess it depends on your average and as always DYOR but if like me you’re not in need of the cash for a few years just suck it and see. Many businesses are struggling after the pandemic and as the wars end and the world adjusts money will be made.

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.