Petrofac has applied to the High Court in London to appoint administrators to its parent company, in a move that throws the future of 2,000 North Sea jobs into uncertainty.
The decision marks a dramatic low point for the one-time FTSE 100 giant, which was valued at £6billion at its peak in 2012 but saw its shares suspended in May after collapsing to just £20million.
In a statement this morning, Petrofac said it had “carefully assessed its options” following last week’s decision by Dutch grid operator TenneT to terminate a major offshore wind contract.
The company’s directors have now filed to appoint administrators to Petrofac Limited, the group’s ultimate holding company.
The company stressed that this is a “targeted administration” affecting only the holding company, with trading operations expected to continue while restructuring and merger options are explored.
Petrofac said it retains the support of key creditors — including an ad hoc group of noteholders and its revolving credit and term loan lenders — who are maintaining forbearance agreements and extending loan maturities “on a rolling basis”.
Advisers from consultancy Teneo are expected to oversee the process, with administrators working alongside Petrofac’s executive management “to preserve value, operational capability and ongoing delivery” across its subsidiaries.
The move follows two years of faltering restructuring talks aimed at tackling a debt pile of around $600 million (£450 million). The last-minute collapse of those talks came on Thursday when TenneT pulled a key contract to build offshore wind infrastructure in the Netherlands — a blow that proved terminal for the group’s financial recovery plan.
The Aberdeen-based UK arm, which employs around 2,000 people, delivers operations, maintenance, and training services for major clients including Shell and BP. A source close to the company told The Sunday Times the division remains in a “strong position” to continue trading.
Petrofac employs around 7,000 people globally, with significant operations in the United Arab Emirates supporting construction projects in oil, gas, and renewables.
While administrators move in at the holding-company level, Petrofac said it remains “focused on serving its clients and maintaining operational capability across its businesses.”
Further updates are expected once the court has formally appointed administrators.
A spokesman for the Department for Energy Security and Net Zero (DESNZ) said: “The UK arm of Petrofac has not entered administration and is continuing to operate as normal, as an in-demand business with a highly skilled workforce and many successful contracts.
“Petrofac’s administration is a product of longstanding issues in their global business. The Government will continue to work with the UK company as it focuses on its long-term future. Ministers are working across all parts of government led by DESNZ in support of this.”