Oil and gas services firm Petrofac is set to appoint administrators, placing thousands of jobs in jeopardy across its global operations.
The company, which employs more than 7,000 workers worldwide, including approximately 2,000 at its vital North Sea hub in Scotland, confirmed its application to the High Court on Monday.
This critical development follows the complete collapse of restructuring negotiations, which faltered after a pivotal contract was unexpectedly withdrawn last week.
Petrofac stated it would now enter insolvency proceedings after the Dutch electricity grid operator, TenneT, terminated a significant agreement for the construction of windfarms.
The firm emphasised that the administration will specifically affect the group’s main holding company.
It will continue to trade and assess options for an alternative restructuring, with different merger and acquisition options also being explored with its key creditors.
Advisers at corporate finance firm Teneo are expected to advise over the administration.
“When appointed, administrators will work alongside executive management to preserve value, operational capability and ongoing delivery across the group’s operating and trading entities,” the company said.
Petrofac’s UK business is based in Aberdeen and is involved in the operation of North Sea oil platforms for firms including BP and Shell.
The company was worth around £6 billion at its peak in 2012 but has slumped in recent years.
It was worth around £20 million when its shares were suspended in May after being severely impacted by an investigation by the Serious Fraud Office and volatile energy prices.
