Petrofac Limited (LSE:PFC), the fabrications group, has thrashed out a financial restructuring that will see it receive US$325 million of new funding and covert debts of almost US$800 million into shares to secure its immediate future.
Existing shareholders will be ‘materially diluted’ but still have a stake in the refinanced business.
A group of holders of senior secured notes (Ad Hoc Group) plus a new investor are putting up the money, which includes US$194 million worth of new equity.
Some US$772 million of existing debt will also be converted into new equity with total gross debt after the restructuring estimated at US$250 million.
In a statement, the directors said their view is that the restructuring provides “the best available outcome for the Group, its 8,000 strong workforce and its external stakeholders”.
René Médori, chairman, added: “We are pleased to have announced today a deal with creditors and other stakeholders which will materially strengthen Petrofac’s financial position.
“We recognise the demands that this process has placed on the Group’s stakeholders, each of whom is playing a vital role in delivering this critical step for the business.
“The financial restructuring will mark a new beginning for Petrofac.”
Shares fell 16% to 8.57p.