Member Info for PaulCurtis

He assumes new supply is unaffected by falling prices, clearly this is self correcting and the market will balance

Trek

SEIT is 67% invested in the US! UK is 8% and Europe 19%

The more I go through the Docs the clearer it is that Petrofac is currently in an absolutely dire position. This means that new money is calling the shots and new equity is getting a great deal (as in slice of the cake) in return for taking the risk.

The EV is only c. $600m so if PFC trades well post restructuring then new equity should do very well.

So when shares eventually re list, if around the admission price, could be worth buying some. However these shares will be priced at a fraction of current share price

This deal is gun to the head blackmail for existing debt holders who end up with a derisory share of the cake - 17.3%

If they convert to SS bonds, by stumping up $925,000 for one million new bonds, they get their current holding of $1m at par, 20 cents in the market, converted to $830,000 new SS bonds. And they get a big wedge of new equity as well.

Trouble is, can they find the cash, equivalent to five fold the value of their current holding?

My point is that New PFC could have a decent amount more cash if they can.

This restructuring agreement is very difficult to decipher. It is very bad for equity and bad for existing Bondholders who end up with just 17.3% of the new equity.

The only slight positive is that BH’s are being incentivised to cough up for a new SS bond for every bond held by getting 83% of their ‘old’ bond converted into SS status. Hence this old bond would then not be converted into equity. Would make a small impact on equity dilution

In fairness to management this is a nightmare restructuring because so many different parties each with their own vested interest. Perhaps 17 banks to sign off just the RCF. Then the creditors who may be forced to accept something unpalatable.

The bondholders should be the easy bit

And then the week before Xmas….

I suspect they are very close but now rounding up all the various agreements. The lawyers are going to have a bumper Xmas bonus!

I’m surprised because many investors, customers and clients will think no extension on Monday means that Administration looms. Not good PR or the business.

Hence I remain convinced that we will get the dea,l or at least an update in the very near future.

I agree, there are I believe 15 to 20 banks and then insider bondholders plus other creditors. Will be like herding cats to get all the Legals signed off.

As off this morning Plan A was still restructuring. And PFC and their PR team have been flooded with worried investors fearing Administration post no debt extension

I’ll be very surprised if no news tomorrow

Ended on Friday. No extension is hopefully good news insomuch as we are now very close to a deal, perhaps today, perhaps tomorrow.

This is not deramping because I doubt anyone here will change positions at such a late stage but I’m still saying D4E will be at 4p. Hope I’m wrong and it’s much higher, this would mean bondholders retain more value ie no hair cuts

But I very much doubt if any of us come out of this cracking the champagne

If the Government’s ambitious targets are to be met, where will the funding come from with NESF trading at a 30% discount to NAV? Maybe new solar is more productive but NESF is valued off income.

Bonds still around 25 cents. Will we finally get the deal today/Monday! Getting very tedious!

This is the reality

‘We are looking at a 50% debt for equity conversion, but its likely to be more depending on the IBR [business report]. The IBR will also drive the view of what the company’s funding needs are,” said a source close to the situation. “No-one is concerned about how distressed the company is as we know its pretty bad, its more about how to platform the company and the business for the following year.”

Bondholders are expected to receive the IBR in early November.

Expires today, hopefully we get deal terms tonight or Monday 7am rather than yet another extension

D4E’s usually value existing equity at the value of its listing, about £20-25m or 4-5p.

Equity is clearly otherwise worthless. Debtholders don’t want equity, they would much rather sell the assets and get their money back as cash. Obviously they can’t. D4E is a last desperate attempt to salvage value.

And if when D4E goes though they will be selling maybe $600m of equity! There will be the mother of all equity overhangs.

This is obvious. The share price will be dead in the water.

Until someone bids for new clean PFC on the cheap

Q: Are there any expectations of sales of noncore assets within the restructuring?A: The key noncore asset is the PM304 asset in Malaysia. We have received offers and expect to make a decision in Q4. We also have a 10% stake in the JSD6000 vessel, which is operational and leased, but we do not plan to keep it long-term

We know that the debt is c. $850m and the majority is being converted.

We know there is going to be an equity raise.

We know there are now no sales so I assume Malaysia has fallen through?

And it appears that we are still some way off from getting anything back on Thai Oil?

Did anyone here buy the shares today? I just wonder who is buying if not shorters closing is size. JakNife on ADVFN (he is/was a shorter) says borrowing costs are currently 400% and this is killing the shorters.

I’m on hols so not listened to webcast and only scanned Results.

Was there anything said about Malaysia? Oil price tanking can’t help the sale?

And very scant info on Thai Oil in the Results - what does still progressing mean!

And Results say margins on new contracts is good (I assume in part renewables have better margins) but and detail on historic contracts which still appear a can of worms. And probably the main reason for the protracted restructuring

Anything in the webcast about the D4E terms. If I’m right at circa 4-5p they really should hint at horribly dilutive as opposed to just dilutive

Dan

The RNS says the majority of the debt will be converted to equity. Total debt about $850m hence my $600m…

There is obviously going to be an almighty overhang. Debtholders won’t want to hold equity. Many of them aren’t allowed to hold equity. They are going to have circa $600m of shares that they don’t want.

This is surely obvious? I mean, does anyone here disagree?

The share price post restructuring can only go down from the issue price?

Imo this is when a predator will pounce, maybe 3-6 months post restructuring when all the problems are sorted and share price still bombed out.

I hope the ‘Paul is a shorter’ drivel will now stop.

The big question is what will be the D4E price. This hinges on whether debt holders (senior secured) suffer a loss. If they do, then equity is effectively worthless. However the restructuring will value equity at is listing value, about £20-25m or 4-5p a share.

This looks by far the most likely outcome.

The only slight caveat is the equity raise. The more that the existing equity can bring to the party the better their negotiating position. However we know that ‘the majority’ of the debt is being converted and Bondholders are putting in $300m of additional liquidity.

Implies equity’s contribution is pretty small. And there are new investors who will want as low a price as possible.

The only positive is that, because this is going to take many months to complete, shorters may close next week in view of their high borrowing costs. However the terms of the D4E will be announced in a few weeks so they could just wait for that.

The GKP restructuring is worth following, the shares drop on the first general announcement but then crash on the actual terms. Check it out.

Finally remember that debtholders will be left with c. $600m of shares that they don’t want. There will be a massive stock overhang that will depress the share price for many months post restructuring