Subsea services player DeepOcean has started a restructuring process in relation to three UK subsidiaries in its Cable Laying and Trenching business (“CL&T Group”), which will enable the CL&T Group to be wound down on a solvent basis.
DeepOcean 1 UK, DeepOcean Subsea Cables and Enshore Subsea have filed a practice statement letter with the High Court in London and distributed a copy to all of their known creditors.
The companies will propose restructuring plans to their creditors and the objectives of those plans.
A court hearing should be held on 15 December 2020 at which the 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.
This specifically focuses on the restructuring of the CL&T Group and the court process only involves the above-mentioned companies, DeepOcean noted.
According to DeepOcean, 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.
Øyvind Mikaelsen, CEO of DeepOcean also 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.”
In addition, the Group has appointed Kirkland & Ellis and Alvarez & Marsal to advise on the process.