The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
I'm not too fussed if it hasn't yet, might even top up at some point.
I genuinely can't see how we aren't going to make money here and lots of it, especially over the short term period.
Funding will not be an issue and LB group will be all over this now
I am excited to see where it goes the next 15 working days before market closes before Christmas
Strategic and financial options to strengthen balance sheet
The Board is examining a range of strategic and financial options with the objective of materially strengthening the Company’s balance sheet, securing bank guarantees and improving short-term liquidity. A key aim of this review is to protect the interests of Petrofac’s shareholders, creditors and employees while the Group continues its focus on safe and effective delivery for its clients.
Management has been making progress in organic actions to unwind working capital, collect receipts on ongoing and new contracts and to unlock long-outstanding commercial settlements. In addition, Management is considering the sale of non-core assets, and is actively engaged in discussions with financial investors to take a non-controlling position in certain other components of the business portfolio. As part of an overall plan, these transactions would result in a material improvement on the balance sheet. The Company is also exploring potential new financial options across all its classes of capital.
Business update
Operationally, as demonstrated by its backlog growth, the Group continues to deliver well for its clients, and has a healthy Group pipeline scheduled for award in the period to the end of 2024.
The full year free cash flow guidance1 provided with our interim results was based, in part, on unwinding historical working capital and collecting advance payments on the new contracts secured in 2023. While the Group has made progress in reaching contractual settlements and unwinding working capital, given delays in securing advance payment guarantees, it no longer expects to receive these advances before the year-end. Consequently, it no longer expects to meet the guidance previously provided for full year cash flow.
The Group has continued to maintain liquidity above its financial covenant2 and will provide further details in its trading update on 20 December 2023.
Update on performance guarantees
As noted in Petrofac’s H1 results, it is an industry standard contractual requirement to provide Performance Guarantees for EPC contracts. Banking and surety market appetite for the provision of these guarantees in support of the contracts won by Petrofac has reduced, resulting in delays in their provision. Petrofac remains in active discussions with its credit providers to secure the guarantees on the new contracts as well as with the clients of these new contracts. The measures being taken to strengthen the balance sheet are, in part, designed to secure future guarantees.
Group Chief Executive Tareq Kawash commented: “Petrofac’s underlying business is robust with material growth in our backlog from approximately US$5.5 billion in new awards in new and traditional energy this year. This demonstrates our competitive strength and long-term potential. To deliver on this, we are working hard to address short-term liquidity challenges and strengthen the f
Aye, I won't be investing just on the back of what is on here but definitely tempting as at some point this will bounce.
I'll make my own target once the bell rings. So many potentials, I've taken out decent profits from elsewhere on Friday
Mining licences issued. Boooooom
Finance agreed - MoU with No1 manufacture of high performance Tio2 pigments to fund project into production - progressing towards definitive agreement.
Geologically advantageous deposit - very high 17.7% THM grades with potential for increase.
Experienced leadership - Highly experienced board and in country team
Strong economics - Base case of 56% snd NPV of $155m - low funding requirement compared to overall capex investment
High re rate potential - multiple visible development milestones including execution of offtake finance - massive disconnect between stock and market and project value
Product mix of saleable products - ilmenite, zircon, rutile and garnet
Exploration upside - Over 90% of project not yet drilled and drilling confirms continued mineralisation laterally and at depth
I get you Paul they can take as long as needs be but as the presentation shows after about 6 minutes, the lawyers were already engaged a few weeks ago?
Greg said his target is the end of the year to get it agreed as you all know so I would be surprised if we have to wait another few months, he is very experienced with this after working with Rio Tinto.
The hardest bit for this company is execution but it is a very straightforward project overall. All holders will be flying once this JV is sorted whether it is this week or in 3 months but expect a big rise up until news at the very least
What do you mean they haven't wasted much time on this?
They've visited site?
They've extended MOU's?
They've been in constant contact with CMET as per the recent presentation?
They've put cards on the table for the past 12-18 months and have done, as far as I can see, as much as they can until the licenses had been reinstated.
I can see it being 5 x by this time next year for sure based on that presentation, I can easily see it going past 10p by the end of the year, even more so with the contract signed!
I reckon both sides will be pushing hard to get it over the line so we can hit the new year on a good footing!
$2 million straight away and the other $8 million is staged but yeah we are in the very early stages but the foundations are ridiculously strong!
Greg said we aren’t anywhere near global as a company but we have global potential from what is in Sri Lanka. LB group won’t mess about either and will probably increase production and like he said. They may want to go harder and quicker :D sounds good to me !
You do what is best for you Mirefoor. If you want a little profit then take it, if you feel like we have more to gain then hold. Everyone has different circumstances
For me i'm fully loaded in my ISA and will leave it in for the potential of hitting 30-40p
I also have a few that I will trade now and again