(Bloomberg) -- Creditors to Petrofac Ltd are opposing its debt restructuring, a proposal the oil services firm says it needs to prevent its collapse into liquidation.
Saipem Spa and Samsung E&A Co Ltd argue that they are the primary targets of the prospective restructuring, given they are “very substantial actual and contingent creditors” of Petrofac to the tune of “hundreds of millions of dollars.”
The plan would see liabilities related to a Thai engineering project written off in exchange for a nominal payment, according to a filing to a London court by the two parties.
Petrofac is seeking legal permission to convene creditor meetings to vote on the plan. It argues that in the absence of a restructuring, there will be group-wide insolvencies in multiple jurisdictions, court documents show. The company has so far received support from 73.7% of bondholders for the plan that would see approximately $772 million of existing debt converted into equity.
Petrofac argues that striking a deal is also a matter of urgency because without one it risks losing a number of valuable contracts from European grid operator Tennet. The company says it can only acquire these contracts by providing certain performance guarantees — and on the condition that the restructuring is completed by Feb. 28.
Saipem is an offshore construction and drilling company headquartered in Milan. Samsung E&A provides engineering construction and project management services.
The creditors’ claims on Petrofac stem from a project related to the Sriracha Refinery in Thailand, where they are joint-venture partners. Also in opposition to plan are certain shareholder groups who have initiated legal proceedings relating to improper disclosure around an investigation into Petrofac by the Serious Fraud Office.
The opposing creditors are asking the court to adjourn the convening hearing, saying they were not given enough time to assess “very substantial” material for the hearing until Feb. 26.
“This is procedurally unfair and there is no good explanation for it given that the Plan Companies have been planning and formulating the Plans for many months,” the filing stated.
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