Member Info for PaulCurtis

..interesting summary of where we are now ahead of (let’s hope) the final restructuring RNS tomorrow

https://www.reorg.com/articles/petrofac-2026-senior-secured-notes-fall-10-points/

Https://www.petrofac.com/media/1yihxype/petrofac-ar23-notice-of-meeting-2024.pdf

No reference to the Restructuring other than possibly Resolution 20 requesting consent to call an EGM at 14 days notice rather than 21 days.

They say that they welcome questions by email but by 20th September

Is anyone going to the AGM?

And have any of you seen the AGM Resolutions to vote on? I can’t see them on the website?

No mention of any Q&A or webcast but perhaps at 7am tomorrow.

And we’ve not had a trading statement since the last results. What’s happening re Thai Oil and the Malaysian sale? Are they struggling to get any new business, especially when no PG’s.

Bottom line we don’t have a clue what’s going on.

I’d hope they have to update us tomorrow regardless of the deal.

YB

Because the bonds are massively senior to equity, just like a mortgage on your house. If you do well then bonds must be worth c. 100 cents ie 300% upside.

Monday must also give us a trading update and only an idiot won’t be nervous about this!

So we are all locked in, rampers, derampers and at least one honest bondholder!

Nothing we say now will make any difference but I really hope that you guys are smiling at 7.01am because if you are happy I will be ecstatic.

I’m assuming that if not the actual terms, they have to tell us what’s happening in a lot more detail than they have over the few months. Good luck to all of us and best wishes for a relaxing weekend.

The only possible reason for no update at 7am (they updated at 7am last month) is that they are going to the wire and hoping to wrap up deal by, at the lates, 7am Monday or that they can’t get the debholders to agree to the extension.

I’d hope that, with the AGM next week, they are targeting today or 7am Monday for the deal.

Exciting times! Bonds are static at 24 cents versus 100 cent par so BH’s are obviously still expecting a painful outcome .

Agreed the last extension was announced at 7am. Hopefully today’s (or Monday at 7am) means they are very close to sign off and now be the deal.

More ominously they can’t agree another extension. If you read the GC it refers to one group of debtholders wanting PFC to check out the insolvency route.

YB

Yes because borrowing costs have only increased dramatically about 3 months ago. They have to service these costs with cash outflows.

If anyone knows? Will they be paying holding costs on the current price or the price they originally shorted?

YB

PFC have clearly said it’s a D4E or insolvency. It’s surreal that many of you won’t bother to read what PFC have clearly stated in print.

Why are shorters closing? The cost of borrowing is horrendously high (see JakNife on ADVFN) so those shorters without unsecured long term borrowing are possibly being killed with cash outflows to service their positions.

And as this restructuring drags on interminably there must be an increasing risk of insolvency. That whatever the hold up problem, PFC can’t sort it.

If insolvency and the shares are suspended, then those holding costs will just rack up and up although the shorters should eventually get a pay day.

We must get an update today and I hope it’s a deal. This is the longest restructuring I’ve ever come across.

The only positive is the bond price up to 23 cents from 16 cent over the last month

CS

The problem is what is the D4E exchange price?

At the moment you shareholders collectively own 100% of the company and you are very geared to any upside.

eg the EV of the business is currently valued at $850m plus $120m equity = $970m. If EV were to increase to say $1,100m, then your equity would double in value. That’s the geared benefit of loads of debt.

But if all the debt is converted to equity at 17p you will end up owning just a fraction of the company and therefore very little upside. However the shares should trade c.17p before all the debtholders dump their unwanted shares

My prediction is the D4E will be at 4p

Hopefully we find out tomorrow, this has gone on too long

If the EV were to increase to

Clunges

‘Where are you getting this debt figure from Paul, I can only see £530 million dollars

You have also mentioned that PFC is insolvent, how have come to that conclusion since trading as such would be against the law’

The debt is the $600m bonds and the RCF/TL bank loans are about $200m plus accrued unpaid interest

PFC is only solvent because the Debtholders have not instigated insolvency as they try to hammer out a restructuring

SJ

It’s not £90m versus $8bn orders!!!

You are airbrushing $850m of debt.

PFC has an EV of $850m plus £90m.

But the Going Concern statement makes clear that this is not an option. They refer to running out of money in September. Please read it.

Also you are forgetting the other elephant in the room, the lack of (and desperate need for) Performance Guarantees. Without these the business implodes as contracts cancelled

PFC have made this all very clear.

The reality is that PFC need to pay back c. $200m of RCF/TL debt by Q3 (of which they are already in default for most of this).

Plus they have to payback $650m of bonds by end of 2026.

Where is this money coming from if there is no D4E?

Obviously the bond extension ends this Friday and AGM next week. You would think/hope that they can finally sort of the restructuring this week, especially with the spotlight of the AGM next week.

So as Warren Buffett says, we will find out who is wearing their Speedo’s.

I’m still thinking a D4E at 4p.

What do you all think the share price will be post restructuring and why?

This is from JakNife on the ADVFN thread

‘On the equity side the cost of the borrow is ridiculously high, at pixel it's 170% with IG but it's been over 500% at points in the recent past. Those sort of levels destroy the economics of a short.’

May explain why some shorters who are not locked into fixed borrowing deals are being forced to close.

The bond price doesn’t really correlate with the share price.

Bond price hinges on what BH’s are expecting from the restructuring

Share price hinges on what you guys are expecting from the restructuring.

Clearly one group of us is very very wrong. I hope it’s the BHs because if the eventual restructuring leaves current equity with significant value, then bondholders must make out like bandits! That’s basic capital hierarchy, Debtholders are ahead of shareholders when it comes to carving up the cake/carcass.

G

The minimum size to trade the bonds is $200,000 at par so that’s about $50,000 at current price. Would need to go through a broker who will place your order with another middle man bond broker.

I have no idea what bondholders will get from the restructuring and only steer is the current bond price. Although the par value of the bonds is $600m remember that 47% of this is locked up ie inside.

That still leave a free trade of c. $300m at par or $75m at current price so not hopelessly illiquid

GeOrge

To answer your question I would be ecstatic if you guys come out of this with shares worth more than the current price. It would be my greatest ever stock market win because the only way this can happen is if my bonds are worth 100 cents.

My largest % holding is the Bonds, hence my interest. I’m feeling a bit more relaxed now because bonds up 35% over last couple of weeks. I explained yesterday why the bond price is strongly indicative of what’s actually happening.

The bond price at 25 cents indicates that bondholders expect to eventually emerge with maybe 50 to 60 cents.

It is nonsense to think this is good news for equity since the bonds are like a mortgage on your house.

Let’s say you own a £500K house with a £350K mortgage. The house drops in value by £200K. What is the value of your % holding?

Obviously zero.

If the Bank are forced to take a haircut then you get left with sod all. The same principle applies here.

The Debtholders have priority