DeepOcean has commenced a restructuring process in relation to three UK subsidiaries in its cable-laying and trenching business that will enable the group to be wound down on a solvent basis
DeepOcean 1 UK Limited, DeepOcean Subsea Cables Limited and Enshore Subsea Limited have filed a practice statement letter (PSL) with the High Court in London and distributed a copy of the PSL to creditors.
The PSL informs creditors of the 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 companies will 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.
“This is a specific and focused restructuring of the cable-lay and trenching group and the court process only involves these companies,” DeepOcean said.
“The process follows an extended period of loss-making operations by the cable-lay and trenching group and reflects changes in the industry’s procurement strategies and available installation capacity, as well as a mismatch between the 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 cable-lay and trenching group will be affected by the restructuring.
DeepOcean said it remains committed to the renewables sector and to investing in new technology which reduces costs and emissions.
DeepOcean chief executive Øyvind Mikaelsen 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. Creditors can access documentation relating to the restructuring process at www.lucid-is.com/DeepOcean.