In a press release posted on its web site on Monday, Petrofac introduced a delay to its audited full 12 months 2023 outcomes and a brief suspension of its shares.
“The corporate expects a brief delay in issuing its audited full 12 months 2023 outcomes, which it now expects to publish by Could 31, 2024,” Petrofac stated within the assertion.
“Though the audit is considerably progressed, the corporate and its auditor require further time to finish the annual report,” it added.
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“Because of this, in accordance with the Monetary Conduct Authority’s (FCA) Disclosure and Transparency Guidelines and Itemizing Guidelines for the publication of audited monetary statements, the corporate has engaged with the FCA, and buying and selling within the firm’s shares might be quickly suspended from 7.30 am on Could 1, 2024, till its full 12 months 2023 outcomes are revealed,” it continued.
On the time of writing, Petrofac’s share value is buying and selling at GBX (penny sterling) 11.34 (14.21 cents). The corporate’s share value was valued at greater than GBX 23.00 (28.83 cents) on April 26.
Rigzone has requested Petrofac what the short-term share suspension means for the group’s shareholders. On the time of writing, the corporate has not but responded to Rigzone.
Monetary Restructuring
In its assertion, Petrofac famous that, as a part of the group’s ongoing monetary restructuring, an ad-hoc group of senior secured noteholders have made a proposal to supply additional credit score to the enterprise of as much as $300 million. This contains $200 million of recent funds and $100 million of credit score assist to assist safe efficiency ensures for sure of its current contracts, the corporate highlighted.
The corporate stated within the assertion that “this non-binding proposal relies upon, amongst different issues, the corporate securing these efficiency ensures, and would require the conversion of a major proportion of the group’s current debt to fairness”.
Petrofac identified within the assertion that it’s in lively discussions with credit score suppliers to acquire the required ensures, which the corporate highlighted would additionally launch over $200 million of collateral and retentions. Petrofac stated within the assertion it should present an replace on the result of these discussions as acceptable.
“This improvement comes as the corporate continues to handle its cost obligations to protect liquidity while progressing the opposite elements of the restructuring with different stakeholders,” Petrofac highlighted within the assertion.
“The group’s upcoming cost obligations embody amortization funds due on the corporate’s financial institution amenities and the coupon cost due on its senior secured notes on Could 15, 2024,” it added.
“The corporate’s lending banks have agreed to numerous rolling brief time period deferrals of contractual amortization funds whereas the corporate progresses the monetary restructuring. The corporate continues to interact with its lending banks on extending these deferrals as required,” it continued.
Petrofac famous within the assertion that it doesn’t count on to make the cost of the bond coupon on the due date of Could 15.
“The cost has a 30-day grace interval,” it stated.
“The ad-hoc group of noteholders, representing roughly 41 p.c of the excellent notes, has entered right into a forbearance settlement with the corporate, which supplies an assurance that these noteholders won’t take any motion in respect of the non-payment of the coupon till not less than June 30, 2024, with a view to present time for the group’s monetary restructuring to be progressed,” it added.
Petrofac revealed within the assertion that it’s going to search to interact with “different noteholders within the coming weeks”.
“Managing these cost obligations is of essential significance to the corporate’s potential to keep up ample liquidity within the short-term whereas it’s working to implement the monetary restructuring,” Petrofac warned.
Non-Core Asset Gross sales, Thai Oil Clear Fuels Venture
Petrofac highlighted within the assertion that “good progress” is being made with non-core asset disposals, “with non-binding gives obtained for the group’s share within the PM304 Manufacturing Sharing Contract (PSC) in Malaysia, the method for which could possibly be accomplished in Q3 2024”.
“Presents are consistent with the worth of anticipated money flows (topic to grease value and oil premium assumptions) over the remaining time period of the PSC which expires in September 2026,” it added.
In its newest assertion, Petrofac additionally famous that, in its buying and selling replace revealed on December 20 final 12 months, it “highlighted a threat in relation to the timing of the negotiations on the Thai Oil Clear Fuels undertaking”.
“Petrofac and its three way partnership companions stay engaged with its shopper in relation to the reimbursement of further undertaking prices,” it stated.
“On the time of reporting the complete 12 months 2023 outcomes, administration doesn’t count on to have progressed discussions sufficiently to acknowledge the anticipated final result of the negotiations in its accounts,” it added.
“Because of this, the corporate expects to acknowledge an incremental loss in its E&C division of roughly $130 million for 2023,” it continued.
Internet Debt, Monetary Efficiency
The corporate identified in its assertion that its web debt at December 31, 2023, was $583 million, which it stated was decrease than guided on December 20, 2023, and consistent with interim outcomes, “reflecting the continued efforts of the group to handle its cost obligations”.
“Asset Options has incurred further prices on one in all its Engineering, Procurement, Building, and Commissioning (EPCC) contracts, and expects to report an EBIT for 2023 which could possibly be as much as $15 million to $20 million decrease than beforehand guided, pending the result of negotiations,” Petrofac stated within the assertion.
The corporate added that its monetary efficiency for the 12 months ended December 31, 2023, is “in any other case anticipated to be broadly consistent with the buying and selling replace of December 20, 2023.
“The board and administration are centered on arriving at a complete refinancing answer as rapidly as potential,” Petrofac Chairman René Médori stated within the assertion.
“We’re inspired by the engagement with the ad-hoc group of noteholders, which we hope demonstrates momentum on this complicated course of. We stay grateful to all our stakeholders for his or her persistence and continued assist of Petrofac,” the chairman added.
Tareq Kawash, Petrofac’s Group Chief Government, stated, “operational exercise continues as anticipated and our groups are delivering effectively within the preliminary phases of the contracts awarded in 2023”.
“On the Thai Oil Clear Fuels contract, we’re working intently with our shopper and companions to speed up supply of this complicated undertaking and conclude negotiations on the reimbursement of prices. Whereas the business negotiations will solely conclude after our full 12 months reporting cycle, we’re making progress,” Kawash added.
“Petrofac has a big order e-book of high-quality tasks, robust market positions and compelling future alternatives that are evident from the lately introduced awards. We’re working to place the efficiency ensures and the suitable capital construction in place, with a view to ship on this potential,” Kawash continued.
Lender Discussions
In a press release posted on its web site on April 12, Petrofac stated it had engaged and remained in discussions with its lenders to restructure its debt which it stated would lead to a major proportion of the debt being exchanged for fairness within the enterprise.
The corporate additionally stated it continued to be in dialogue with potential traders and “sure main shareholders” in relation to potential additional funding within the firm and revealed that it remained in negotiations with potential purchasers concerning the sale of non-core property.
In a press release posted on its web site on March 5, Petrofac stated lively discussions have been progressing with Petrofac’s stakeholders, together with its lending group, comprising each bondholders and lending banks, and different capital suppliers.
In an replace posted on its web site on December 20, 2023, Petrofac highlighted that, on December 4, 2023, it introduced that Aidan de Brunner had joined the corporate as a Non-Government Director “to drive engagement with finance suppliers, traders and different stakeholders in an lively assessment of strategic and monetary choices with the target of materially strengthening the corporate’s steadiness sheet, securing financial institution ensures and enhancing short-term liquidity”.
In that replace, Petrofac identified the corporate’s “distinctive new order consumption throughout each E&C and Asset Options, totaling roughly $6.8 billion within the year-to-date”. The corporate revealed in that replace that the group’s backlog was anticipated to be roughly $8.0 billion on the finish of the 12 months.
To contact the writer, e-mail andreas.exarheas@rigzone.com
