Hedge fund short sellers continue to target embattled energy services provider Petrofac

Short selling

Hedge fund short sellers continue to target global oilfield services provider Petrofac, which has suffered a USD180 million annual loss and falling revenues amid an ongoing fraud investigation.

BlackRock Investment Management has a net short position of 1.28 per cent, while CapeView Capital, Engadine Partners, and WorldQuant also registered negative wagers against London-listed Petrofac in the past week, FCA disclosures show.

The firm - which has been among the most heavily-shorted UK stocks by hedge funds in recent years - reported a net loss of USD180 million in its annual results last week, with revenues squeezed from USD5.5 billion to USD4.1 billion over the course of 2020.

In the past, high-profile names including AHL Partners, Millennium, Citadel and Marshall Wace have placed bearish bets against the embattled firm, which designs and manages infrastructure for the global oil and gas industry.

Petrofac’s value has been on a sustained downward trajectory in recent years, and has continued to tumble from 172.85 since the start of this year. In March, the firm’s share price dived sharply from 134.45 to 91.40, before recovering to around 124 in April.

In the results statement, group CEO Sami Iskander acknowledged “headwinds” facing the firm, and said the Serious Fraud Office probe into a former employee has had “a very real and material impact” on the business.

The firm lost a key United Arab Emirates contract following the investigation, which saw ex-global head of sales David Lufkin plead guilty in January to three charges of bribery and corruption.