From ADFN bb ....this is doomed....3 Feb 2024 22:43
Investtofly,
"Could Asfari take this private?"
Of course he "could", but would he?
1. In addition to having to pay $190m for the equity (at the current 29.16p share price) the bank debt and bonds both contain change of control clauses that would make them immediately repayable. That means he'd have to pay another $252 + $600m to repay them. So in total he'd have to pay $1,042m to take the company private.
2. Presumably he'd want to borrow funds to finance the acquisition; but that wouldn't be easy! Petrofac's current banks want out so what makes you think that any other bank would think differently? And the bonds currently trade at 48% of par implying a yield to maturity of 40%+!!!
see:
If Petrofac's cost of debt is 40%+ then who could possibly afford to pay those interest rates?
3. It also gets slightly worse. Petrofac is forecast to make losses of c. -$13m in 2024 so anyone taking PFC private would need to fund another year's losses and cross their fingers that the business will turn in 2025.
4. And given that Petrofac has made cumulative losses of $1,020m over the last seven years (which includes an estimated $235m for 2023) then would anyone really want to pay $1,042m to take them private?