Petrofac Limited ( PFC)
Petrofac Limited: Delay to publication of 2023 results, Update on
restructuring and Trading Update
29-Apr-2024 / 07:01 GMT/BST
This announcement contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 of 16 April 2014 (MAR) as it forms part of
domestic law by virtue of the European Union (Withdrawal) Act
2018.
29 April
2024
DELAY TO PUBLICATION OF 2023
RESULTS, UPDATE ON RESTRUCTURING AND TRADING
UPDATE
Petrofac
today announces a delay to its audited full year 2023 results which
it now expects to publish by 31 May 2024. The Company also reports
the progress made with creditors on its financial restructuring and
issues a trading
update.
Delay
of full
year 2023 results and temporary suspension of
shares
The
Company expects a short delay in issuing its audited full year 2023
results, which it now expects to publish by 31 May 2024. Although
the audit is substantially progressed, the Company and its auditor
require additional time to complete the annual
report.
As a
result, in accordance with the Financial Conduct Authority’s (FCA)
Disclosure and Transparency Rules and Listing Rules for the
publication of audited financial statements, the Company has
engaged with the FCA, and trading in the Company’s shares will be
temporarily suspended from 7.30 a.m. on 1 May 2024 until its full
year 2023 results are
published.
Update
on Strategic and Financial
Options
As part
of the Group’s ongoing financial restructuring, an ad-hoc group of
senior secured noteholders have made a proposal to provide further
credit to the business of up to US$300 million, comprising US$200
million of new funds and US$100 million of credit support to help
secure performance guarantees for certain of its existing
contracts. This non-binding proposal is dependent upon, amongst
other things, the Company securing these performance guarantees,
and would require the conversion of a significant proportion of the
Group’s existing debt to
equity.
The
Company is in active discussions with credit providers to obtain
the required guarantees, which would also release over US$200
million of collateral and retentions, and will provide an update on
the outcome of those discussions as
appropriate.
This
development comes as the Company continues to manage its payment
obligations to preserve liquidity whilst progressing the other
components of the restructuring with other
stakeholders.
The
Group’s upcoming payment obligations include amortisation payments
due on the Company’s bank facilities and the coupon payment due on
its senior secured notes on 15 May
2024.
The
Company’s lending banks have agreed to a number of rolling short
term deferrals of contractual amortisation payments while the
Company progresses the financial restructuring. The Company
continues to engage with its lending banks on extending these
deferrals as
required.
The
Company does not expect to make the payment of the bond coupon on
the due date of 15 May. The payment has a 30-day grace period. The
ad-hoc group of noteholders, representing approximately 41% of the
outstanding notes, has entered into a forbearance agreement with
the Company, which provides an assurance that those noteholders
will not take any action in respect of the non-payment of the
coupon until at least 30 June 2024, in order to provide time for
the Group’s financial restructuring to be progressed. The Company
will seek to engage with other noteholders in the coming
weeks.
Managing
these payment obligations is of critical importance to the
Company’s ability to maintain sufficient liquidity in the
short-term while it is working to implement the financial
restructuring.
Good
progress is also being made with non-core asset disposals, with
non-binding offers received for the Group’s share in the PM304
Production Sharing Contract (PSC) in Malaysia, the process for
which could be completed in Q3 2024. Offers are in line with the
value of anticipated cash flows (subject to oil price and oil
premium assumptions) over the remaining term of the PSC which
expires in September
2026.
Trading
Update
In its
Trading Update of 20 December 2023, the Company highlighted a risk
in relation to the timing of the negotiations on the Thai Oil Clean
Fuels project. Petrofac and its joint venture partners remain
engaged with its client in relation to the reimbursement of
additional project costs. At the time of reporting the full year
2023 results, management does not expect to have progressed
discussions sufficiently to recognise the expected outcome of the
negotiations in its accounts. As a result, the Company expects to
recognise an incremental loss in its E&C division of
approximately US$130 million for
2023.
Net debt
at 31 December 2023 was US$583 million, which was lower than guided
on 20 December 2023 and in line with the interim results,
reflecting the continued efforts of the Group to manage its payment
obligations.
Asset
Solutions has incurred additional costs on one of its Engineering,
Procurement, Construction, and Commissioning (EPCC) contracts, and
expects to report an EBIT for 2023 which could be up to US$15
million to US$20 million lower than previously guided, pending the
outcome of
negotiations.
The
Group’s financial performance for the year ended 31 December 2023
is otherwise expected to be broadly in line with the Trading Update
of 20 December 2023.
René
Médori, Chairman, said:
“The
Board and management are focused on arriving at a comprehensive
refinancing solution as quickly as possible. We are encouraged by
the engagement with the ad-hoc group of noteholders, which we hope
demonstrates momentum in this complex process. We remain grateful
to all our stakeholders for their patience and continued support of
Petrofac.”
Tareq
Kawash, Group Chief Executive,
said:
“Operational activity continues as expected and our
teams are delivering well in the
initial phases of the contracts awarded in
2023. On the
Thai Oil Clean Fuels contract, we are working closely with our
client and partners to accelerate delivery of this complex project
and conclude negotiations on the reimbursement of costs. While the
commercial negotiations will only conclude after our full year
reporting cycle, we are making
progress.
“Petrofac has a large order book of high-quality
projects, strong market positions and compelling future
opportunities which are evident from the recently announced
awards. We are working to put the performance guarantees and the
right capital structure in place, in order to deliver on this
potential.”
ENDS
For further information
contact:
Petrofac:
James Boothroyd, Head
of Investor Relations
James.boothroyd@petrofac.com
Sophie Reid, Group Head of
Communications
Sophie.reid@petrofac.com
Teneo (for
Petrofac):
+44 (0) 207
353 4200
petrofac@teneo.com
NOTES TO
EDITORS
Petrofac
Petrofac is a leading
international service provider to the energy industry, with a
diverse client portfolio including many of the world’s leading
energy companies.
Petrofac designs, builds, manages,
and maintains oil, gas, refining, petrochemicals and renewable
energy infrastructure. Our purpose is to enable our clients to meet
the world’s evolving energy needs. Our four values - driven, agile,
respectful, and open - are at the heart of everything we
do.
Petrofac’s core markets are in the
Middle East and North Africa (MENA) region and the UK North Sea,
where we have built a long and successful track record of safe,
reliable, and innovative execution, underpinned by a cost effective
and local delivery model with a strong focus on in-country value.
We operate in several other significant markets, including India,
South East Asia and the United States. We have 8,500 employees
based across 31 offices globally.
Petrofac is quoted on the London
Stock Exchange (symbol: PFC).
For additional information, please
refer to the Petrofac website at www.petrofac.com
Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group.
The issuer is solely responsible for the content of this
announcement.
|