SURF contractor Ceona has fallen into administration, Ernst & Young (EY) informed today.
Stuart Gardner and Alan Hudson of EY were appointed Joint Administrators of Ceona Holding Limited and Ceona Crewing Limited and Alan Bloom, Alan Hudson and Colin Dempster of EY were appointed Joint Administrators of Ceona Investments Limited and Certain UK Group companies (the Group).
Ceona, whose head office is in Hammersmith, also holds two other premises in Aberdeen and Houston (USA).
On appointment of the Joint Administrators the business ceased trading leading to a significant reduction in the scale of the business, resulting in 102 redundancies.
18 employees have been retained by the Group in Hammersmith, Houston and Aberdeen to assist the Joint Administrators whilst they seek to realise value in the assets of the Group. In particular, the Joint Administrators now intend to take steps to market for sale the assets of the Group, including the Ceona Amazon.
Alan Bloom, Joint Administrator of the UK Group companies, commented: “In the period leading up to the administration, the Group’s cash flows came under significant strain due to falling demand for the Group’s services as a result of the depressed market conditions and ongoing investment in the Group’s fleet.
“Despite attempts to restructure the Group it was unable to achieve a turnaround on a solvent basis and the Group was therefore placed into administration by the Directors.”
It should be noted that Ceona Pte Limited, OIG Giant I Pte Ltd and OIG Giant II Pte Ltd are not in an insolvency process and will continue to operate.
Since June this year, Ceona has been trying to adjust to tough subsea market caused by the fall in oil prices.
Norway’s GC Rieber Shipping also terminated a charter agreement for the subsea vessel “Polar Onyx” after Ceona failed to fulfill its obligations under the agreement.
Furthermore, following today’s news, GC Rieber Shipping, in its Oslo Stock Exchange announcement, said it will seek to recover outstanding and future claims and losses through the established cash deposit and from the companies in administration. It is uncertain to which extent demands will result in significant coverage, GC Rieber said.
Chief executive of industry body, Subsea UK, Neil Gordon, said: “With its fresh approach to subsea vessels and construction, Ceona is a good example of a young, dynamic company aiming to do things differently. Today’s announcement highlights the tragic consequence of major project cancellations and postponements and lack of new projects coming onstream.
“Despite our rapid growth over the last few years and our world-leading position, the subsea sector is not immune to the impact of the low oil price, particularly those with costly assets such as vessels. As an industry, we must be doing more and doing it faster to adjust to current conditions. Subsea UK, along with other industry bodies, is focused on driving real changes in behaviour that will result in the necessary actions that deliver true collaboration, genuine efficiencies and a re-setting of the cost base that is not simply about cutting margins.”