The Lemon Fool

Bouleversee wrote:What's the betting on the amount of fine?

How much are they going to fine a loss making company?

monabri wrote:Good timing on the part of Schroder Investment Management taking a 16.59% stake last month (25th Aug).

https://www.investegate.co.uk/article.a ... 25735EGFFA

Was it all last month? They already owned over 10% before that deal acc. to the form but perhaps there were other deals earlier in the month.

monabri wrote:

Bouleversee wrote:What's the betting on the amount of fine?

How much are they going to fine a loss making company?

I expect they will let them off in the circs.

50% up in the last few days - I'm glad I held on!

I came across this video on the ii website - https://youtu.be/0wNA1fks1vw?t=161

I've never given charts much credibility, but this seems to be a classic example of being wise after the event. The chart has turned up because of a specific event, namely the end of the SFO case, not because of some arcane rule of charting.

It may well be that charts are sometimes useful predictors, but I can't see that this sort of prediction has any credibility at all.

Remind me when the decision on the fine will be made. IIRC it was postponed for some reason. Recent increases haven't made much impression on my losses.

This is the answer to my question:
https://www.petrofac.com/media/news/sta ... estigation

Monday is the day the sentence will be passed.

https://www.energyvoice.com/oilandgas/3 ... bery-plea/

( link provided for source reference).

"Petrofac and Serious Fraud Office fight over fine after guilty bribery plea
The Serious Fraud Office (SFO) has said Petrofac should face a $209million (£154m) fine for pleading guilty to seven bribery offenses, about double what the company said it can afford at a London court hearing."

In 2017, a fine of £154m would have been considered to have been reasonable ( ie a slap on the wrist). There was discussion that the fine would be >$1billion and the shareprice fell and fell, wiping off billions of pounds from the market cap.

There was also a reduction in the dividend = money on the shelf to pay for any potential fine ( I seem to recall that the divi reduction was a saving which would have been of the order of the eventually fine).

monabri wrote:https://www.energyvoice.com/oilandgas/353757/petrofac-serious-fraud-office-fine-bribery-plea/

( link provided for source reference).

"Petrofac and Serious Fraud Office fight over fine after guilty bribery plea
The Serious Fraud Office (SFO) has said Petrofac should face a $209million (£154m) fine for pleading guilty to seven bribery offenses, about double what the company said it can afford at a London court hearing."

In 2017, a fine of £154m would have been considered to have been reasonable ( ie a slap on the wrist). There was discussion that the fine would be >$1billion and the shareprice fell and fell, wiping off billions of pounds from the market cap.

There was also a reduction in the dividend = money on the shelf to pay for any potential fine ( I seem to recall that the divi reduction was a saving which would have been of the order of the eventually fine).

Fingers crossed for tomorrow then.

PFC's lawyer has earned her pay...and some!

https://www.telegraph.co.uk/business/20 ... l-rumours/

"Shares in oil services provider Petrofac surged this morning even after the company was handed a $95m (£70m) fine for failing to prevent bribery in the Middle East.

The London-listed company had pleaded guilty to seven charges of bribery after it secured a plea deal with the Serious Fraud Office (SFO).

The penalty included a $64m fine and a $31m confiscation order, as well as £7m to cover the SFO's legal costs. But it was well below the £154m fine the anti-fraud unit had been seeking.

Shares jumped as much as 17pc to their highest level since June 2020."

monabri wrote:PFC's lawyer has earned her pay...and some!

Yes, a surprisingly good result.
I doubt I'll ever see half of what I lost on them (currently 79% down on capital) but at least they can move forward now and hopefully get back to securing new contracts. I look forward to the recent restrictions on tendering being lifted.

Of course their biggest problem may be that they can't offer bribes in the Middle East while their competitors can....

Spiderbill

Yes, I'm only 65.5% and 61.5% down on my 2 accounts now and can't see that improving all that much in the near future but would be delighted to be proved wrong

petrofac and gazprom alliance
https://www.investegate.co.uk/petrofac- ... 1655EEQHS/

Gazprom and Petrofac have today signed a strategic partnership through Gazprom's INTI - Russian Institute Oil/Gas Technology Initiatives to export and promote the ambition, quality, and standards of the Russian energy industry domestically and internationally.

daveh wrote:petrofac and gazprom alliance
https://www.investegate.co.uk/petrofac- ... 1655EEQHS/

That's one I didn't see coming
I wonder which aspect of PFC attracted the Russions the most.....

Spiderbill

Indeed. My comment was "Mmm." but that's not enough letters for a post on TLF. I can 't say the news fills me with joy. What do others think?

Bouleversee wrote:Indeed. My comment was "Mmm." but that's not enough letters for a post on TLF. I can 't say the news fills me with joy. What do others think?

I'm just glad of any business that comes in and boosts the share price. We may not like Russia as a state, but the majority of O&G activity in which companies like PFC operate seem to be in dodgy and corrupt states - which is what led to the problem in the first place. Yet the giant oilco's like BP and Shell seem to operate quite happily in Russia, so why not PFC?

If they do a good job (and from what I've heard they are a well-respected, highly professional company) it can only enhance their reputation to be selected as advisor to such a prestigious client, and this should help with the rehabilitation process that we all hope for.

If such companies took the high moral ground and only dealt with `nice' countries they'd very soon go out of business.

https://www.investegate.co.uk/petrofac- ... 2642ESECW/

"The Company intends to raise gross proceeds of approximately US$275 million (£200 million), through the issuance of, in aggregate, up to 173,597,412 ordinary shares in the capital of the Company (the "New Shares"), at an issue price of 115 pence per New Share (the "Issue Price"). The Issue Price represents a discount of 27.2 percent to the closing share price of 158 pence on 25 October 2021."

"Under the Open Offer, Qualifying Shareholders will have an entitlement of one New Shares for every four existing ordinary shares held."

"Shareholders who do not acquire New Shares in the Open Offer will experience dilution in their ownership of approximately 33.5 percent and shareholders who take up their Open Offer Entitlement in full will experience a dilution of approximately 16.8 percent as a result of the Capital Raise and Director Subscriptions."

Dividend ....Jan 2023 earliest.

"Under the terms of the new debt facilities, the company will be permitted to pay dividends from 1 January 2023, subject to the satisfaction of certain covenant tests"

From todays "RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2021"

https://www.investegate.co.uk/petrofac- ... 2506EKBKK/

It's an interesting business model :

"The Company intends to raise gross proceeds of approximately US$275 million (£200 million)....The Issue Price represents a discount of 27.2 percent to the closing share price...Proceeds from the Capital Raise will be used...to:
Pay, in January and February 2022, the US$106 million (£77 million) penalty imposed in relation to the SFO investigation; and
Repay existing indebtedness."

"We want you to invest in our business because we're such crooks that the Serious Fraud Office imposed a massive fine and the company can't afford to pay it, and our existing bankers have run a mile."

Was the fine more than PFC had allowed for initially?

What are other holders intending to do about this offer? I already have a large (for me) holding in PFC, having topped up previously, and, although I haven't done the sums yet, I don't think I dare risk any more, especially as one of my other major holdings (FSJ, also in marine services) has just done a massive nosedive. They will also probably want more money. I hate dilution, however.

Bouleversee wrote:Was the fine more than PFC had allowed for initially?

What are other holders intending to do about this offer?

I don't know what provision PFC had made for the fine, but it was less than I'd expected, and that seems to have been the general consensus.

Having thought long and hard I've decided to accept the risk and take up the offer. From what I've gleaned about PFC they are in technical terms very well thought of, and I'm sure there's a lot of sympathy for them in the markets they service - after all, they simply got caught doing what their rivals have been doing for decades and almost certainly still are doing. I suspect that most people involved in that end of the industry aren't particularly bothered about ethical issues - they just want a company that can do the work competently and competitively, and PFC seem to fulfil those criteria.

I was also reinforced in my decision by this snippet from the Proactive Investor site - https://www.proactiveinvestors.co.uk/co ... 64296.html

I may be proved wrong, and live to regret it, but it's not going to ruin my life even if I am wrong. I'd already written my PFC shares down to well under £1 each, so in effect that's my new starting point and the only way is up!

Bouleversee wrote:Was the fine more than PFC had allowed for initially?

What are other holders intending to do about this offer? I already have a large (for me) holding in PFC, having topped up previously, and, although I haven't done the sums yet, I don't think I dare risk any more, especially as one of my other major holdings (FSJ, also in marine services) has just done a massive nosedive. They will also probably want more money. I hate dilution, however.

PFC dividend was 68cents , approx 50p per share. 343 million shares.

I seem to remember thinking after a reduction in the dividend that the divi reduction equated to £140m and I thought to myself " that's earmarked for any fine". They subsequently cancelled the divi entirely.

However, these are my recollections from 2017 so .....

https://www.hl.co.uk/shares/shares-sear ... /dividends