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Petrofac plans to raise $275 million to pay bribery penalty, cut debt

Petrofac plans to raise $275 million to pay bribery penalty, cut debt
By Reuters
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-British oil services firm Petrofac Ltd said on Tuesday it planned to raise $275 million through a stock sale and use the funds to pay a fine for bribery-related offences and cut debt, sending its shares tumbling 23%.

The company forecast annual net margin in the engineering and construction division to be in line with 2020 levels and said it was on track to deliver $250 million of cost savings this year, with plans to reinstate dividends in "due course".

Petrofac also rejigged its debt with a $500 million bridge to bond facility, a $50 million term loan and a $180 million revolving credit facility. The firm, which suspended dividend payments last year, will not be able to resume payouts before January 2023, depending on passing its debt covenant tests.

Earlier this month, Petrofac was fined 77 million pounds ($105.89 million) and a former executive received a two-year suspended sentence after both pleaded guilty to bribery in Iraq, Saudi Arabia and the United Arab Emirates.

The penalty from Southwark Crown Court in London was less than the $240 million the company had said it might face for failing to prevent bribery between 2011 and 2017.

With the four-year investigation by Britain's Serious Fraud Office hanging over its past contracts, Petrofac has struggled to secure contracts in the Middle East.

Shares of the oil services company slid as much as 23% to 121.9p, marking their worst intraday session since Jan. 15.

($1 = 0.7272 pounds)

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