Saipem runs, appeal against Petrofac restructuring upheld in UK

(Il Sole 24 Ore Radiocor) - Saipem rallied in the Italian stock market, rising to the highest level since 23 June, after the UK Court of Appeal upheld the appeal filed by the company and Samsung E&A against Petrofac's restructuring plan. The purchases, in the wake of the positive trend in the European oil sector (in Milan, Tenaris ), also come in the wake of the round scored by Saipem in the Petrofac affair.

On 20 May, in fact, as Equita reconstructs, 'the High Court of England and Wales had approved a plan proposed by Petrofac to restructure the financially troubled company, releasing $355 million in new financing'. The plan, however, had been challenged by Saipem and Samsung E&A - involved with Petrofac in the troubled Thai Oil project - who appealed to the Court of Appeal to overturn the decision.

Thai Oil's joint venture 'generated heavy losses that Saipem and Samsung believe they need to absorb only partially. According to them, Petrofac has to share those losses. Saipem and Samsung contest that the judge should not have ignored the indirect benefits of a liquidation of Petrofac (in which Petrofac's competition would cease) and argue that the restructuring would be unbalanced: the main financial benefits would flow to the new lenders without considering the creditors' losses'.

Summing up, the Court ruled that these findings merited a more thorough examination than the High Court's initial outcome. The Court, in practice, did not invalidate the plan, but ruled that the restructuring should be reviewed by the High Court. And, now that the appeal has been upheld, 'Saipem has a slightly improved position on the Thai Oil project, which is currently in litigation'. In the meantime, investors are rewarding the stock at Piazza Affari.