Petrofac (LSE:PFC) - Case Update

Oilfield services provider Petrofac has provided a positive update on its proposed restructuring plan.

The company has recently struggled, reporting a net loss of $162 million in the first half of 2024. In late December, the company announced that it had entered into a binding lock-up agreement with certain key stakeholders on a comprehensive financial restructuring plan. The proposed restructuring involves US$325 million in new funding and the conversion of approximately US$772 million of existing debt into equity. In aggregate, the restructuring is expected to deliver at least US$325 million of new funding to the Petrofac Group. After repayment of certain obligations and transaction costs, this is expected to result in an immediate increase in liquidity of at least US$195 million.

Petrofac has now revealed that the consent solicitation to amend the agreement governing its notes, which is a key element of the restructuring, has received significant support well in excess of the 50% required, with approximately 85% of bondholders supporting. It is expected that the bondholders who consented to the amendment will also support the restructuring.

In addition, more than 70% of bondholders have now committed to support the restructuring plan by acceding to the lock-Up agreement. This represents an increase of about 13% since the launch of the restructuring and constitutes over half of the secured creditor class. The company expects further accessions in the coming weeks.

The Group also has also reached a settlement agreement, effective on restructuring, in relation to a key historical claim, and continues to work on settling other claims in line with the restructuring plan.

In order to allow time to satisfy a remaining condition precedent of the lock-up agreement, the Group has adjusted the restructuring timetable by four weeks, with the sanction hearing expected to occur in late March.

Kroll Issuer Services is the lock-up agent. Houlihan Lokey is the financial advisor to the ad hoc group.

Read the update here.