The UK-listed oil and gas services company Petrofac, which is undergoing financial restructuring, has received a proposal for up to $300 million in additional credit from a group of senior secured noteholders, according to a company press statement.
This proposal could offer much-needed relief as Petrofac grapples with upcoming debt payments and tight liquidity.
The proposal includes $200 million of new funds and $100 million of credit support to help secure performance guarantees for certain existing contracts. However, the proposal hinges on the company obtaining these guarantees and converting a significant portion of its existing debt to equity, the statement disclosed.
It said Petrofac is actively pursuing discussions with credit providers to secure the guarantees, which could release over $200 million in collateral and retentions on those existing contracts.
The company is also focusing on managing its payment obligations to maintain sufficient liquidity in the short-term. It has negotiated rolling short-term deferrals of amortization payment obligations with lending banks, extending these deferrals as required.
Regarding coupon payment due on senior secured notes on 15 May 2024, the statement said the company has reached a forbearance agreement with a group of noteholders (representing 41% of outstanding notes), postponing any action related to the missed payment until 30 June to facilitate ongoing restructuring efforts.
Additionally, Petrofac is pursuing asset sales, with offers received for its share in a Malaysian production sharing contract, the process for which could be completed in the third quarter of 2024.
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(Writing by SA Kader; Editing by Anoop Menon)
(anoop.menon@lseg.com)
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