PGS (Sell, TP: NOK3.50) - Questionable headroom
PGS recently raised USD450m in new bond debt at an all-in cost north of 14%, to partly repay its Term Loan B. We estimate it needs to generate USD134m in FCF over the next five quarters to repay the Term Loan B stub from its cash balance. As a reference, 2022 FCF was USD74m and, with tough comparables on late sales and capex guided ~USD50m higher YOY, we believe some might question whether PGS has enough liquidity headroom to cover the USD138m Term Loan B stub maturing 12 months from now.Petroleum Geo-Services is engaged in providing geophysical services and oil and gas production services. As of Dec. 31, 2001, Co. operated six Ramform design vessels in its marine seismic data acquisition operations.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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