Reviewed: 18th September 2015
Over a hundred jobs are to be lost as the energy sector subsea engineering contractor Ceona heads into administration after being unable to overcome persistent cash flow problems.
The company, which is headquartered in London but has operating bases in Aberdeen and Houston, Texas, has called in administrators after efforts to turn around the firm’s fortunes failed in recent months.
“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,” a statement from joint administrator Alan Bloom explained.
“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 condition and ongoing investment in the group’s fleet,” he added.
Energy industry operators throughout the UK have been struggling to cope with the impact of dampened prices for oil and gas in recent quarters.
Plans are now in place for administrators to market Ceona’s assets for sale in the coming days and weeks with a view to seeing the company’s creditors paid back as fully as possible.
Ceona was created in 2012 largely on the basis of financial backing from Goldman Sachs Capital Partners.
The company was accused of failing to fulfil its obligations in relation to a major contract earlier this month and was forced to initiate redundancies in June in an effort to reduce costs across its business.
“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,” administrators of Ceona made clear in their recent statements.
A recent report from Oil and Gas UK, the industry trade organisation, suggested that the number of people employed directly or indirectly by the British energy industry has fallen by some 60,000 since the beginning of 2014.
“This great industry of ours is facing very challenging times,” said Deirdrie Michie, chief executive of UK Oil and Gas.
“Last year, more was spent than was earned from production, a situation which has been exacerbated by the continued fall in commodity prices.”
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