RE: Goldman Sachs23 Oct 2023 16:47
Positive news aside, the reality is that in Petrofac, we are ultimately dealing with an insolvent balance sheet as we stand. It is clear to see that they are extremely reliant on cash advances from some of these new contracts to avoid running out of cash (which by the way, I don't even think any of these potential cash advances are confirmed as yet!!).
In my opinion, the market is recognizing the risk associated with Petrofac that has long been there. I was a holder of PFC for a long time, buying at around £0.80 a share from memory. I sold my holding a few months ago for the exact reasons noted above.
Ultimately I think we are a looking at a scenario whereby Petrofac need to either continue new making at the current rate, or look at raising capital again in the near future. Either way, PFC remains to be an extremely speculative play...
That being said, if it hits around £200MN valuation, this may provide sufficient upside for me even if there is potential capital raise dilution down the road.