Petrofac announces $275m capital raise to pay bribery fine

Oilfield services provider Petrofac announced a $275m (£199.6m) placing and open offer on Tuesday, the proceeds of which will be used to reduce debt and pay a £77m fine relating to bribery offences in the Middle East.

The company plans to issue just under 173.6m shares at 115p each, which is a 27.2% discount to the closing share price on Monday.

Petrofac announced earlier this month that it had struck a deal with the Serious Fraud Office following a four-year investigation and that Southwark Crown Court had imposed the fine for seven offences of failing to prevent bribery in the Middle East between 2012 and 2015.

Petrofac chairman René Médori said: "Support from all our shareholders and debt providers in the refinancing plan will provide the company with a stable platform from which to grow and look to the future with confidence.

"I welcome the continuing support of our largest shareholder and fellow board member Ayman Asfari, as Petrofac moves on to the next chapter of its history."

News of the placing came alongside the group’s results for the six months to the end of June, which showed that its net loss widened to $86m from $78m in the first half of last year. The company put this down to the bribery fine.

Petrofac said trading and new awards were in line with expectations, and continue to be impacted by Covid-19.

Chief executive Sami Iskander said: "While the first half performance reflects the challenges of the market and Covid-19, we have continued to deliver successfully for clients and enhance our delivery capability.

"Importantly, the conclusion of the SFO investigation allows us to focus on the future and unlock new opportunities - with an uncompromising approach to compliance and ethics that will always be at the core of how we operate. This rigorous approach to governance sits alongside our environmental and social agenda and is critical to our future success."

At 1205 BST, the shares were down 18% at 129.43p.