Petrofac (LON: PFC) has extended its existing forbearance agreement on a missed interest payment with a group of lenders from 23 August to 20 September 2024.
The decision covers unpaid interest on the coupon on the group’s senior secured notes.
Petrofac previously said that it had agreed the forbearance agreement of an ad hoc group noteholders covering around 47% of the outstanding senior secured notes, and setting a deadline of “at least until 30 June” while they worked to agree a deal.
The deal means that these noteholders will not take action over the non-payment of the coupon until at least 20 September 2024, allowing additional time for the group’s financial restructuring to be progressed.
Petrofac has been struggling with rising debt, having missed a 30-day grace period on a coupon that was supposed to be paid 15 May on $600m loan notes due in 2026.
This saw the company miss the deadline to deliver its full year report for 2023, resulting in a temporary suspension of trading in its shares.
Petrofac is seeking a financial restructure to improve liquidity and secure bank guarantees to support current and future contracts, and is in talk with lenders to see some of the debt swapped for equity.
An ad-hoc group of senior secured noteholders previously proposed providing further credit to the business of up to US$300mn.
The company reported a $505 million net loss in its delayed full-year financial results for 2023, while its net debt reached US$583mn.
The company has been looking to sell some of its non-core assets to provide fresh capital, such as its PM304 Production Sharing Contract in Malaysia.
However, the company has managed to hold its revenues steady, coming in at $2.5 billion in 2023 compared to 2022’s $2.6bn. It has also been successful in securing major contracts to grow its order book and create the promise of future returns.
The company took a further hit this year as ratings agency Fitch downgraded it to “restricted default” (RD) from C due to the missed interest payment.
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