Petrofac Ltd. has signed a lock-up settlement with collectors laying the phrases for a monetary restructuring that features new debt and fairness.
The brand new settlement “formalizes the in-principle settlement introduced by the Firm on 27 September 2024 with sure key stakeholders together with an advert hoc group of holders of senior secured notes and sure different senior secured noteholders, which collectively comprise roughly 57 % of the senior secured notes”, the Jersey-based engineering firm stated in a press release Monday.
Noteholders have for a number of occasions prolonged a forbearance settlement with Petrofac withholding themselves from pursuing their authorized claims over the corporate’s failure to pay $29 million in curiosity.
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The lock-up settlement consists of dedicated new funding for Petrofac amounting to $325 million, comprising $194 million of recent fairness and $131 million of recent debt. The brand new fairness issuance is enabled by the advert hoc group of noteholders, new and current shareholders and an unnamed new investor. The brand new debt is offered by the advert hoc group of noteholders, different noteholders and the brand new investor.
“The Firm might upsize the brand new fairness issuance by as much as US$25m in mixture previous to the Restructuring Efficient Date, and it intends to undertake a retail providing of roughly US$8m in 2025”, Petrofac stated.
The agreed restructuring phrases additionally contain the conversion of about $772 million of current debt into fairness, “which is able to considerably deleverage and strengthen the Group’s stability sheet”, Petrofac stated. “Put up-Restructuring complete gross debt (together with new funding) will likely be roughly US$250m”.
Moreover core shoppers have agreed on various efficiency safety for sure contracts awarded to Petrofac final yr and contracts anticipated to be awarded after the restructuring.
The restructuring additionally includes “extinguishing sure historic precise and contingent liabilities together with, notably, in relation to the Thai Oil Clear Fuels contract”, Petrofac stated.
Additionally agreed is a “transformation plan to formalize the assemble of the Group’s E&C, ETP and Asset Options supply items”.
Furthermore Petrofac’s board will see modifications, together with the instalment of a brand new chair in 2025.
In the meantime a ultimate settlement has but to be reached on $72 million of recent efficiency assure amenities, which might allow the discharge of $56 million of money collateral to Petrofac.
A number of circumstances have to be met to finish the restructuring, together with shareholder approval, regulatory clearance and settlement with assure suppliers to waive defaults ensuing from the restructuring, based on the assertion.
“The settlement introduced at present will present a sustainable monetary construction that may help our marketing strategy and permit the Group to maneuver ahead with confidence”, stated chief government Tareq Kawash. “Bolstered by our present backlog and pipeline of alternatives, the enterprise is nicely positioned as a number one supplier of crucial vitality infrastructure.
“We have now made good progress in closing out our legacy portfolio of contracts, our new tasks are progressing nicely, we’ve got a refreshed technique centered on our strengths, with enhanced bidding self-discipline and challenge governance”.
Outgoing chair René Médori stated, “I sit up for overseeing the conclusion of this course of with a view to transitioning my Board duties to a brand new Chairperson in 2025”.
To contact the writer, electronic mail jov.onsat@rigzone.com
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