DeepOcean winding down cable laying and trenching business
DeepOcean has announced
that it has commenced a restructuring process in relation to three UK subsidiaries
in its Cable Laying and Trenching business (the CL&T Group), which
will enable the CL&T Group to be wound down on a solvent basis. DeepOcean
1 UK Limited, DeepOcean Subsea Cables Limited and Enshore Subsea Limited
(the Plan Companies) have today filed a practice statement letter (PSL)
with the High Court in London, and distributed a copy of the PSL to all
their known creditors.
The PSL informs creditors of the Plan Companies’ intention to propose
restructuring plans to their creditors and the objectives of those plans.
The PSL also gives notice to creditors of a court hearing to be held on
15 December 2020 at which the Plan Companies seek the permission of the
court to grant an order convening meetings of creditors to vote on the
plans, and sets out the composition of the classes of creditors for the
purposes of voting on the plans. Further details are set out in the PSL.
This is a specific and focussed restructuring of the CL&T Group and
the court process only involves the Plan Companies. The process follows
an extended period of loss-making operations by the CL&T Group and
reflects changes in the industry’s procurement strategies and available
installation capacity, as well as a mismatch between the CL&T Group’s
contractual commitments and market conditions.
DeepOcean provides subsea services for all project phases, from survey
and inspection through to decommissioning, and only the services provided
by the CL&T Group will be affected by the restructuring process. DeepOcean
stated it remains committed to the renewables sector and to investing in
Øyvind Mikaelsen, CEO of DeepOcean, said: “Despite our long-term commitment
to the cable lay and trenching division, it has been loss-making for some
time. We have invested and explored structural alternatives to turn around
the business. However, the division is not sustainable and there is no
prospect of it becoming profitable under current market conditions and
with current contractual obligations.
“Unfortunately, we have come to the difficult decision that to propose
an orderly wind-down of the business is the only viable option. This provides
greatest certainty to affected employees, and facilitates protection for
creditors. This allows the rest of the Group to move to a secure financial
footing and continue to provide jobs and create value for stakeholders.
This decision is no reflection on the hard-work and commitment of our valued
employees, who we are supporting through a consultation process.”
The Group has appointed Kirkland & Ellis and Alvarez & Marsal to
advise on the process.