Norwegian offshore wind and oil & gas services player, Reef Subsea, has filed a bankruptcy petition to Bergen District Court despite company’s efforts to restructure and cut costs in order to stay afloat in today’s challenging market.
The company, established in February 2010 and 100% owned by Stavanger-based company HitecVision, is likely to be Norway’s first major oil service company to become a victim of ongoing oil market plunge.
Reef Subsea operates from three core offices in Thornaby, Aberdeen and Bergen, Norway. The company was created in a joint venture between equity investor HitecVision and GC Rieber Shipping, but Norwegian offshore/shipping company decided to sell it’s stake in the company after Reef Subsea had a significant negative result on its business in the fourth quarter 2013.
However, on Wednesday this week, GC Rieber Shipping said in an Oslo stock exchange announcement that they had not received payment for the sale of shares in Reef Subsea and that the company has reasons to believe that the HV V Golf companies, subsidiaries of HitecVision, will not fulfill the terms of the agreement.
According to reports in the Norwegian press, Chairman Mel Fitzgerald said that the fierce competition is one of the main reasons why the company now goes to probate.
“The market fell away for us, although we restructured and cut costs,” said Reef Subsea CEO Duncan L. Macpherson to Bergens Tidende.
It remains unknown what impact will the bankruptcy announcement have on Reef Subsea workers.
“It is too early to say whether the employees will lose their jobs as a result of bankruptcy,” says Macpherson.
In April last year, Reef Subsea was reorganized in three separate entities to be known as Reef Subsea, X-Subsea and Technocean Subsea.
Furthermore, GC Rieber Shipping has also confirmed today that HV V Invest Golf AS and HV V Invest Golf II AS, two investment companies through which HitecVision owns Reef Subsea, have been declared bankrupt.