PGS (Sell, TP: NOK5.00) - Walking a tightrope
Following its bond refinancing in March, we questioned whether PGS had raised enough capital to cover its Term Loan B maturity in March next year without incurring liquidity issues. As Q2 is set to be weaker than we previously expected due to poor weather and an ill-timed contract termination, we believe the noise around its liquidity gap will increase in H2e. Even if we assume USD60m in new debt, we calculate a cUSD80m liquidity gap related to the Term Loan B maturity. Unless late-sales surprise on the upside over the coming quarters, we believe this liquidity gap will need to be covered with new equity. We reiterate our SELL and NOK5 target price.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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