Update on Petrofac’s Proposed Financial Restructuring

UK-headquartered oilfield services provider Petrofac has provided an update on its proposed financial restructuring. The court hearing for the restructuring process was held on February 28, 2025, with the convening hearing adjourned to March 20 or 21, 2025. The court aims to expedite the process, concluding the sanction hearing in mid-April 2025.

In a previous update on February 21, 2025, Petrofac announced agreements with financial investors to release $80 million of cash collateral for a key E&C contract performance bond. This replaces the provision of new guarantee facilities by a funded creditor previously announced.

The equity raise is set to increase by $30 million, totaling $224 million, as part of the restructuring, raising a total of $355 million in new funding. Certain creditors will have the opportunity to participate in the equity raise by up to an additional $25 million at the same price as other investors. Existing shareholders are expected to receive 2.2% of the total share capital on the restructuring effective date.

Currently, 73.7% of bondholders have committed to supporting the restructuring plan through a lock-up agreement, representing over half of the secured creditor class. Discussions with other secured creditors are ongoing.

Following the convening hearing, Petrofac will begin the subscription period for secured creditors to choose new money options under the restructuring terms.

Background on Petrofac’s Financial Restructuring

In September 2024, Petrofac reached an agreement in-principle with key stakeholders on a comprehensive financial restructuring to strengthen the group’s financial position and support its strategic goals. The directors have been exploring alternative options since December 2023, with the restructuring deemed the best outcome for the company and stakeholders.

The restructuring plan includes new long-term funding underwritten by senior secured noteholders and additional equity financing from new and existing investors to bolster operational liquidity.

In December 2024, Petrofac formalized the restructuring terms through a binding lock-up agreement with key financial creditors, following the September announcement.

Recent Contract Wins

Aside from restructuring efforts, Petrofac secured a $335 million contract for work on ADNOC Gas’ Habshan Complex. The subsidiary will construct two gas compressor trains, utilities, and power systems for the complex, connecting to ADNOC Gas’ Ruwais LNG project under construction in the UAE.