Petrofac Struggles to Raise Cash
Petrofac, a British oil and gas services company, is struggling to raise cash. On December 4th, the company’s shares and bonds fell after it announced plans to sell assets in order to raise money.
Petrofac’s Financial Struggles
Petrofac has been struggling financially for some time. In 2019, the company reported a net loss of $2.2 billion. This was due to a series of corruption charges and a decrease in oil prices. The company has been trying to restructure its debt and reduce its costs in order to stay afloat.
Asset Sale Plan
In an effort to raise cash, Petrofac announced plans to sell some of its assets. The company said it would sell its engineering and construction business, as well as its oil and gas production business. The company said it would use the proceeds from the sale to pay down its debt and strengthen its balance sheet.
Share and Bond Prices Fall
The announcement of the asset sale plan caused Petrofac’s share and bond prices to fall. The company’s shares fell by more than 10%, while its bonds fell by more than 5%. Analysts said the asset sale plan was a sign of the company’s financial distress and could lead to further declines in its share and bond prices.
Investor Concerns
Investors are concerned about Petrofac’s ability to raise cash and pay down its debt. The company has been trying to restructure its debt for some time, but has been unable to do so. The asset sale plan is seen as a last-ditch effort to raise cash and pay down its debt.
Outlook
It remains to be seen if Petrofac will be able to raise enough cash to pay down its debt. If the company is unable to do so, it could face further declines in its share and bond prices. Investors will be watching closely to see if the company is able to turn its financial situation around.