Member Info for Slift

There simply is no growth for any investment here at TLW.

TLW is doing well to service debts. This helps the debt holders and not the shareholders.

Where are the shareholder returns?

Looking at the January 2024 statement, it's the same this year.

No growth and doing the minimal to service debt with FCF. Ghana assets are becoming more and more mature each year. #

Also regarding Kenya, better to just flog this off for cheap. Afterall, Tullow did receive free stakes here after other operators had exit.

This project is no longer viable for a small operator like Tullow. Even if it's sold, there will be doubts about FID at Kenya unless better terms can be agreed with the Kenyan government and the production license.

There's a lot of M&A happening currently, maybe TLW should start looking at this rather than servicing debt. Debt can always be extended and rolled forward.

Stake under 30% according to this article.

https://noah-news.com/gb/en/business/2024/02/19/london-southend-airport-faces-ownership-reshuffle-amid-financial-woes

Https://www.bnnbloomberg.ca/carlyle-cyrus-plan-london-southend-airport-takeover-to-end-debt-dispute-1.2036463

Minority stake in LSA of

I don't know about update...

But what's due tomorrow is the advance payment of the Tennet project. Realistically, due to payment cycle bs etc. Petrofac won't likely receive this until maybe 29th February.

Up to you mate.

Tosca only needs to acquire £5200 worth of shares to initiate a full takeover.

Would mean they'd have to cough up close to £250m for the debt and an additional £Xm to buy the remaining 70% shares at a premium.

Excluding LSA, Esken has £35-45m worth of assets.

What will Tosca do?

Shareholders had £4m to their name before this deal...

Now little to nothing.

Better to wait until after everything has been announced if anyone wants to invest here

Esken is suggesting 2 scenarios:

1. Accept deal which will see Esken hold "minority" of LSA. Also won't be debt free.

2. Go to court and agree a D4E.

It's not good for shareholders either way.

"would amongst other things result in EAL's shareholding in LSA being significantly reduced to a minority interest"

5%?

10%?

15-20%?

Can't see any higher.

Basically suggesting a D4E between the senior lenders..

Shareholders getting shifted.

Why suggest this if they are disputing the claims?

"demanding repayment of the loan in the amount of £193.75 million by 16 February 2024."

No update from Esken today.

Personally don't expect to see any sort of finance RNS till at least the final week of February (26th).

Though we may get contract wins and hopefully the share price is trading significantly above current levels by then also!

KPA,

"And the bonds currently trade at 48% of par"

Means that PFC or an investor can offer to buy these bonds on the market for $288m.

$288m + $252m + $190m = $730m.

For Ayman, who already owns 16% = $700m.

I think investors need to be a little bit more confident here.

Next week will indicate direction of the share price.

The longer it takes for the RNS the better. This is my investment case here.

As this gives enough time for PFC to receive advance payments, legacy completion payments, and negotiate a deal with banks/creditors/investors.

3 legacy projects are expected to complete (if not already) over the next 1.5 months. Add that to the advance payments received from guarantees secured for the Hitachi project (payment terms will be around 60 days which is fast approaching).

And all of a sudden, the liquidity shortfall projected in October/November will be reduced significantly over the next couple months.

D4E is 100% off the cards now with PFC having not breached liquidity covenant in January. Liquidity must have improved significantly over the past month and will continue to improve as PFC book revenue to the backlog.

Negotiations will be ongoing with all parties and PFC now have another 2-3 months of liquidity to sustain operations (with the waiver of covenants).

Considering that this share was shorted since October, it goes to show that PFC has indeed been significantly cashflow positive since H2/23.

GLA.

For what it's worth, I added over 600k shares today nearer to close of day.

Potentially add more tomorrow.

All the 19.99k and 9794 are all my trades.

Today is the 1st Feb with no RNS from the company.

This means that PFC did not breach the 31st Jan liquidity Covenant test. Liquidity has been in control for month of January.

Ever heard of an NDA?

Hey PaulCurtis,,

The answers to your questions are simple.

It's because the shorters are clueless, as are we.

No leaks has occured and only the BOD are aware of any finance decisions being made.

PaulCurtis,

No, we are not aligned at all.

Bonds and equity will rise when PFC come out of this with a good deal for both equity and bonds.

I'm simply restating what PFC said that they are considering asset sales. PM304 is not a core asset. PFC have been exiting production assets over the past few years and PM304 is the last one.

PFC have hired Aidan to contact for discussion with the bondholders and RCF. There only needs to be a majority agreement.

Regarding value of IES - I think that the BV value is after liabilities and other. I understand that PFC also have cash for operations tied up in this asset also (which is not interchangeable for other liquidity requirements).

So after taking into consideration the liabilities and cash tied up in the asset, then yes - the value is more or less around $60-70m.

Slift

But why stop at asset sales?

Let me quote PFC again - PFC is "actively engaged in discussions with financial investors to take a non-controlling position in certain other components of the business portfolio".

Petrofac's business portfolio is HUGE.

Petrofac has 65 subsidiaries, FULLY owned (100% ownership) by Petrofac.

They also have various associates, joint agreements and joint operations at various stake owned by Petrofac.

Whilst none of these subsidiaries are up for sale, Petrofac has stated that investors could obtain a non-controlling stake (up to 49%) in one or some of this.

There's plenty of other options too, to bolster the balance sheet.

- With $8b backlog, the RFC could be increased in a restructuring from $162m to over $300m (with both term loans being paid)

- Ofcourse as you say an equity raise, but only see this happening with other methods (i.e asset sale)

PaulCurtis,

It's clear you have an agenda here.

But if as you state that there is going to be an equity rise, why aren't the bonds trading at 100? Let me tell you why.

Petrofac has 2 non-core assets to it's name which it can sell. The JSD6000 (10% of SPV) and the Malaysia PM304 operated field. Both these assets are secured against the bond.

If Petrofac were to sell these assets as per their 4th Dec update ("Management is considering the sale of non-core assets"), this would mean that majority of the bondholders would have to agree to this. That means a haircut for bondholders as these assets are actually secured against the bond.

Now let's look at finances. Yes, as it stands Petrofac requires around $400-450m in liquidity. They currently have around $75-100m (ofcourse a minimum $75m is always required due to the RFC liquidity covenant). They also have $100m tied up in collateral for the Tennet guarantee (short term). They also have approximately $200m tied up in legacy contracts, with 40-60% of this coming available in Q1/24. At the very short term, considering the above, Petrofac requires around $120-150m in ADDITIONAL liquidity for performance guarantees on future contracts (and to release the $100m tied in collateral).

Now the JSD6000 (10% SPV) was valued at $54-58m (independent brokers' estimate). Since this valuation, the JSD6000 has been contracted to Saipem on a very long contract. This increases the value of this vessel due to the income stream from contracting this vessel. At worst case estimate, I'd give this (10% SPV) a value of $65m currently.

PM304 is valued at $173m at the end of last year. Today, production from this asset is exactly the same as last year. There would have been depreciation and depletion of reserves ofcourse. Again, at worst case, a 30% discount to this asset prices it at approximately $120m.

So in terms of asset sale, Petrofac has around $185m to dispose of. Now I appreciate that "instantly" selling these assets is almost impossible unless a significantly low priced fire sale. But the assets are there.