Collectors of bonds issued by Petrofac Ltd. have for the seventh time prolonged a forbearance settlement, withholding themselves from pursuing authorized motion over the power engineering firm’s failure to pay $29 million in curiosity.
Jersey-based Petrofac is in default on the senior secured notes due final Might. However an ad-hoc group representing about 47 p.c of the excellent notes and different noteholders representing an additional 12 p.c signed a forbearance take care of Petrofac in April.
That settlement has now been prolonged to December 13 after the prior extension expired November 15 as Petrofac has but to agree monetary restructuring with buyers, together with the forbearing collectors.
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“This forbearance settlement additionally extends to the non-payment of the curiosity coupon that was due on 15 November 2024”, Petrofac stated in an announcement on-line in regards to the newest extension.
“The forbearance settlement is entered into by an advert hoc group of noteholders representing roughly 47 p.c of the excellent senior secured notes and sure different acceding noteholders”.
On October 21, saying the extension that has now lapsed, Petrofac stated it was deferring cost for excellent balances on its revolving credit score facility and time period loans that had been maturing that month.
On September 27 Petrofac stated key stakeholders had agreed in precept to assist the corporate’s proposed debt reorganization. The proposal consists of new long-term funding underwritten by the advert hoc group of noteholders.
Moreover, Petrofac proposed to transform most of its current debt into fairness, “ensuing within the important dilution of the present shareholders, the extent of which continues to be to be agreed”.
The in-principle settlement additionally included “different preparations with sure key shoppers to fulfill the efficiency safety necessities, in lieu of efficiency ensures, to guard key contracts within the Group’s backlog, releasing a big quantity of retentions to Petrofac”.
Petrofac may see a discount of about $100 million in assure necessities for a contract awarded 2023, by way of both a brand new efficiency financial institution assure or different preparations, it stated then.
“The monetary restructure would guarantee efficiency safety necessities are met for Petrofac’s current backlog, strengthen its steadiness sheet and supply a capital construction and enchancment in liquidity which is able to assist the Group in executing its order guide and capturing future progress alternatives”, Petrofac stated. “It might additionally present a runway for a subsequent gradual enchancment in entry to ensures for brand spanking new EPC contracts on regular industrial phrases”.
For the primary six months of 2024, Petrofac reported a year-on-year enhance of $26 million to $162 million in internet losses.
“Operational efficiency within the first half of the yr mirrored the continued affect of legacy contracts, the challenges in securing efficiency ensures and adversarial working leverage”, Petrofac reported September 30.
Its engineering and building (E&C) enterprise logged $103 million in EBIT loss, “reflecting the affect of onerous contracts with no margin recognition and adversarial working leverage as a consequence of low ranges of exercise”.
Alternatively, total income rose 13 p.c to $600 million due to the preliminary phases of contracts received final yr.
Petrofac stated it had $8 billion so as backlog, principally within the Center East and North Africa (MENA), and that it expects to bag $53 billion value of recent contracts over the subsequent 18 months. “E&C’s addressable pipeline is US$44 billion, of which 47 p.c is within the Group’s core MENA markets and 23 p.c in power transition sectors”, it stated. “Asset Options’ addressable pipeline is US$9 billion, of which 62 p.c is in goal growth geographies outdoors the UK & Europe”.
Nevertheless, whereas Petrofac expects E&C exercise to be increased this yr than final yr, it stated the phase nonetheless appears to be like to be “sub-scale because the portfolio transitions from legacy to new contracts”.
“The markets we function in stay strong and now we have secured an excellent stage of recent order consumption in Asset Options”, chief govt Tareq Kawash stated on the time.
To contact the writer, e-mail jov.onsat@rigzone.com
