The Lemon Fool

"A former executive at British oil firm Petrofac has pleaded guilty to eleven counts of bribery as part of an ongoing Serious Fraud Office investigation into the company and its subsidiaries, prosecutors said on Thursday."

"The SFO said the charges related to the making of corrupt offers to influence the award of contracts to Petrofac worth in excess of 730 million dollars in Iraq and in excess of 3.5 billion dollars in Saudi Arabia."

Explains today's sp fall

https://uk.reuters.com/article/us-brita ... KKCN1PW0P4

monabri wrote:"A former executive at British oil firm Petrofac has pleaded guilty to eleven counts of bribery as part of an ongoing Serious Fraud Office investigation into the company and its subsidiaries, prosecutors said on Thursday."

"The SFO said the charges related to the making of corrupt offers to influence the award of contracts to Petrofac worth in excess of 730 million dollars in Iraq and in excess of 3.5 billion dollars in Saudi Arabia."

Explains today's sp fall

https://uk.reuters.com/article/us-brita ... KKCN1PW0P4

...dick...

monabri wrote:Explains today's yield rise

Fixed that for you.

I sold this morning at 489p after seeing the news. This is what sent the price into such a tailspin in 2017 and led to the dividend cut.

They keep winning contracts, but I’m sitting on the sidelines for now to see how this plays out as it could be the start of more bad news. I might top up my Shell holding with some of the proceeds.

Who was it that said SFO investigations always amount to nothing...?

Wasron

Wasron wrote:I sold this morning at 489p after seeing the news. This is what sent the price into such a tailspin in 2017 and led to the dividend cut.

They keep winning contracts, but I’m sitting on the sidelines for now to see how this plays out as it could be the start of more bad news. I might top up my Shell holding with some of the proceeds.

Who was it that said SFO investigations always amount to nothing...?

Wasron

Luckily was alerted to this first thing and got out at a similar price to you. Annoying as I had two orders to sell last week that didn't get filled, as I was concerned that the contracts seemed to have dried up a bit

Walrus wrote:

Wasron wrote:I sold this morning at 489p after seeing the news. This is what sent the price into such a tailspin in 2017 and led to the dividend cut.

They keep winning contracts, but I’m sitting on the sidelines for now to see how this plays out as it could be the start of more bad news. I might top up my Shell holding with some of the proceeds.

Who was it that said SFO investigations always amount to nothing...?

Wasron

Luckily was alerted to this first thing and got out at a similar price to you. Annoying as I had two orders to sell last week that didn't get filled, as I was concerned that the contracts seemed to have dried up a bit

I bought a lot sub-500p, averaging down so had to trim at 550p and then again at 660p.

Down to 432p now, so the opportunist in me is thinking at what price i’d buy the lot back, while the HYPer in me is thinking “stop looking, walk away, this isn’t HYP...”

It is certainly indicating that they wouldn’t be high on the list for someone hoping for a steady and rising income.

Wasron

So much for the SFO worries being "already priced in".
Shows you how a company that still seems perfectly sound and profitable can be turned into a black hole for investors. Now my biggest loser - worse than Carillion.

I still hold in my HYP but I bought some for trading in Jun/July 2017 averaging about £4 and trimmed at £6. I could be tempted again but my HYP chunk will sit where it is, not one for a secure rising income.

Wasron wrote:I sold this morning at 489p after seeing the news. This is what sent the price into such a tailspin in 2017 and led to the dividend cut.

They keep winning contracts, but I’m sitting on the sidelines for now to see how this plays out as it could be the start of more bad news. I might top up my Shell holding with some of the proceeds.

Who was it that said SFO investigations always amount to nothing...?

Wasron

Petrofac's take on it:
www.investegate.co.uk/article.aspx?id=2 ... 3724P&fe=1

No current Board member of Petrofac Limited is alleged to have been involved.

René Médori, Chairman of Petrofac, said:

"The SFO has chosen to bring charges against a former employee of a subsidiary company. It has deliberately not chosen to charge any Group company or any other officer or employee. In the absence of any charge or credible evidence, Petrofac intends as a matter of policy to stand by its employees."

Wasron wrote:

Walrus wrote:

Wasron wrote:I sold this morning at 489p after seeing the news. This is what sent the price into such a tailspin in 2017 and led to the dividend cut.

They keep winning contracts, but I’m sitting on the sidelines for now to see how this plays out as it could be the start of more bad news. I might top up my Shell holding with some of the proceeds.

Who was it that said SFO investigations always amount to nothing...?

Wasron

Luckily was alerted to this first thing and got out at a similar price to you. Annoying as I had two orders to sell last week that didn't get filled, as I was concerned that the contracts seemed to have dried up a bit

I bought a lot sub-500p, averaging down so had to trim at 550p and then again at 660p.

Down to 432p now, so the opportunist in me is thinking at what price i’d buy the lot back, while the HYPer in me is thinking “stop looking, walk away, this isn’t HYP...”

It is certainly indicating that they wouldn’t be high on the list for someone hoping for a steady and rising income.

Wasron

Was a buyer at 350 first time around. I imagine I will be again....

spiderbill wrote:So much for the SFO worries being "already priced in".
Shows you how a company that still seems perfectly sound and profitable can be turned into a black hole for investors. Now my biggest loser - worse than Carillion.

PFC haven't gone to the wall. If the company is found guilty, they'll pay a fine and move on. I'm guessing that there will be more comments on the lines of "the fine will be $1 billion" and they'll never win any more contracts". The shorters will be cut and pasting comments from 18 months ago ( or whenever it was). The share price will no doubt be shorted down if that's not what is already going on.



PFC were about 2% of my portfolio, now they are 1.75%.

The RNS caused a spike in the price but they’ve continued falling. AJBell offered me 393p to buy, but they also failed to get quotes on several occasions.

There’s clearly a lack of belief in those words from many investors.

So I’ve bought a half holding at 393p and will see. Opportunist beat HYPer this time...

Wasron

Wasron wrote:The RNS caused a spike in the price but they’ve continued falling. AJBell offered me 393p to buy, but they also failed to get quotes on several occasions.

There’s clearly a lack of belief in those words from many investors.

So I’ve bought a half holding at 393p and will see. Opportunist beat HYPer this time...

Wasron

I'm also watching it for an entry point, sitting on my hands at the minute

monabri wrote:PFC haven't gone to the wall. If the company is found guilty, they'll pay a fine and move on. I'm guessing that there will be more comments on the lines of "the fine will be $1 billion" and they'll never win any more contracts". The shorters will be cut and pasting comments from 18 months ago ( or whenever it was). The share price will no doubt be shorted down if that's not what is already going on.

PFC were about 2% of my portfolio, now they are 1.75%.

True, and no doubt they'll recover to some extent sometime down the line, but in the meantime it's cost a lot in lower dividends, lack of forward progression of the business, and although the capital loss is only on paper I doubt we'll see 12 quid again (the price of my first purchase) in the next 10 years, so it's certainly cost any flexibility of investment strategy.

If there is a substantial fine then that could mean another cut divi for a year, and probably a lower sp as well, so we'll have lost a few years, some income, and be at around a third of the original value. Even in a HYP/income framework that's not a pleasant position.

My holding is now about 1.8% compared to 2.4% yesterday. At my original buy-in price it'd be 4.7% but I won't be holding my breath for that!

PFC were about 2% of my portfolio, now they are 1.75%.

Same here - so this morning I've upped my holding in PFC by 20% or so.

But then I've always been an optimist (for details, see CLLN, IRV and quite a few others over the years...)

Good luck to all.

https://www.londonstockexchange.com/exc ... 34500.html

"Petrofac PLC is facing the prospect of a GBP400 million payout to investors amid legal action linked to an alleged bribery scandal at the oil services firm."

"On Monday, litigation funder Innsworth and law firm Keystone said that they are analysing potential claims and are actively putting together a group of shareholders to launch action against Petrofac"

Same tactics/comments as 18 months ago.


ps PFC received a new contract today.

https://www.energyvoice.com/oilandgas/n ... car-point/

"Petrofac has won a £73.5 million deal to provide a range of well services for Siccar Point Energy."

I can never get my head round this sort of legal action. Would it be by shareholders who bought before the SFO investigation was made public and sold at a loss afterwards, and so compensation would effectively be paid by those who bought after that date and are still holding?. But what if you did both (as I did, or rather I inherited my husband's holding bought near the top and I topped up at near the bottom and twice again after that as it recovered) and would it make any difference whether you sold any or are still holding all, as I am? Why should any shareholders be responsible for staff bribes (beyond suffering a loss in the value of their shares) rather than the staff concerned or directors/senior management who colluded in it?

What should I be doing now? I was quite prepared to hang on in the hope that the fine would not be excessive and is covered, but a legal action puts a different complexion on it and is difficult to quantify. It might well impede any recovery in the s.p. or drive it further down and be self-defeating for those still holding. What are other holders planning to do?

Nothing.

https://www.standard.co.uk/business/pet ... 63261.html

"The oil services group, headquartered in London, is in the firing line of litigation funding arm Innsworth — which is owned by Singer’s Elliott Management. It previously mounted legal action against Volkswagen and Tesco.

Innsworth is gearing up to file a group claim on behalf of institutional investors such as large US and UK pension funds, claiming they suffered “substantial losses” on their Petrofac investments from 2010 onwards."

What, from 2010? Did they sell in 2010 related to the recent issue? They must be very prescient of an event announced in 2017. Ambulance chasers...

Oh, in 2010 the share price was £10 rising to £17.7 in 2012.

I was rather hoping you would say that, Mon. On the other hand, I seem to remember that the Tesco action was successful though it didn't benefit me. I don't know about the VW one.

I think in the end Tesco only paid out £101m if I remember correctly which was a lot less than originally claimed, don't know how to check this though and I may be wrong. I have just checked the short positions on short interest tracker and Petrofac are 6.18% shorted as of today against Marks and Spencer at 11% for example so I am not sure even the institutions believe that this will go much lower. We will wait and see what happens this week.

Disclosure: - I hold Petrofac having bought after the drop 18 months ago and maybe considering buying a few more if the yield increases further