Bentham proposes funding shareholder action against Petrofac after shares tank on SFO investigation

Rebecca Smith
Petrofac's shares have been sliding
Petrofac's shares have been sliding (Source: Getty)

Bentham Ventures is contemplating funding legal action against Petrofac on behalf of shareholders, after shares have dropped "in excess of 50 per cent" over this month.

The oil firm's shares were drilled down 30 per cent last week, after it announced it was suspending its chief operating officer amid an investigation by the Serious Fraud Office (SFO).

Now Bentham has announced it is mulling backing legal proceedings for those who acquired shares before 12 May 2017.

Read more: Petrofac shares drop 30 per cent after it suspends COO amid fraud probe

In a statement Bentham said: "The alleged grounds of the proposed litigation are expected to be that Petrofac issued false and misleading statements and/or failed to disclose material information regarding its business, its performance and prospects, and/or otherwise misled shareholders and/or concealed the conduct described below."

Bentham then noted that on 12 May, the SFO announced it had launched an investigation into Petrofac, its subsidiaries and employees under suspicion of bribery, corruption and money laundering. It relates to a probe into Monaco-based oil contractor Unaoil.

Last week, on 25 May, Petrofac said it had suspended its chief operating officer, Marwan Chedid, until further notice. Bentham said: "This announcement came after the SFO reportedly informed Petrofac that the company was considered by the SFO to have not cooperated with its investigation."

On announcing the suspension of Chedid, the firm set out a number of changes "to ensure Petrofac can retain its focus on its operations and clients, whilst also ensuring the company is able to continue to engage with the SFO's investigation".

Petrofac shares proceeded to take a tumble, falling 30 per cent to close at 389p on 26 May, and coupled with an earlier fall off the back of the 12 May statement, led to an aggregate share price fall of more than 50 per cent over the month, which Bentham noted left shareholders with "significant losses".

Ayman Asfari is staying on as Petrofac's chief executive, and the company said to "ensure full separation of operational duties and the investigation", he won't be involved in any matters connected to the investigation.

Chairman Rijnhard van Tets said:

These decisions signal the board's determination to cooperate fully with the SFO and its investigation, whilst ensuring Petrofac continues to deliver for its clients.

Petrofac has been approached for comment over Bentham's proposed action.

Separately, it announced that $1bn (£777m) of its $1.2bn revolving credit facility has been extended by 12 months to 2 June 2021, with the assent of its lenders.

The remaining $200m will mature on 2 June 2020.

Petrofac shares were up by nearly five per cent in early afternoon trading to 408p.

Read more: Petrofac auditors find "no evidence" to support bribery allegations

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