Specialist Subsea Services Enters Administration
Blair Nimmo and Geoff Jacobs of KPMG LLP were appointed as Joint Administrators of Specialist Subsea Services Limited (“S3”) on 25th February 2015.
The business has been trading since 2007 and was acquired by the Reef Group in 2009.
S3 operated from leasehold premises in Aberdeen and specialised in remotely operated underwater vehicles (ROVs), offshore survey, geotechnical and subsea intervention, including vessel operations. At the time of appointment, the Company had 82 employees, KPMG informed.
The Company had recently undertaken the charter of an offshore support vessel, the EDT Hercules and acquired two new ROV systems and related equipment. The expansion significantly increased the Company’s fixed cost base which, due to insufficient work levels, became difficult to service resulting in cash flow difficulties. Management had been seeking new investment and were progressing a restructuring exercise.
The Company had secured a frame agreement, and initial call off, with a major subsea engineering and construction company, however, following the insolvency of S3’s parent company and largest customer, the Company’s cash flow issues intensified and new investment could not be secured in time to meet the Company’s liabilities. The appointment of Administrators was therefore necessary.
At the time of appointment, there was minimal work in progress and in the absence of ongoing work which could be undertaken, regrettably, the Joint Administrators had no option other than to make 77 of the Company’s 82 employees redundant with immediate effect.
The remaining five employees have been retained to assist the Joint Administrators to realise the Company’s assets and to help market the business and assets for sale.
The Joint Administrators are rapidly exploring whether an early sale of S3’s business, infrastructure, and assets can be secured.
Blair Nimmo, Joint Administrator and Head of Restructuring for KPMG in Scotland, said:
“The Company is well known in the subsea services industry and has a significant infrastructure comprising several ROV systems together with significant subsea equipment, a customer base and intellectual property.
“We will do everything we can to seek a buyer who may be able to protect the business and which would maximise recoveries for creditors whilst also helping to maximise opportunities for the workforce. We would encourage any party who has an interest in acquiring the Company’s business and assets to contact us as soon as possible.
“We will be working with the employees and the relevant government agencies to ensure that the full range of support is available to all those affected. We would like to thank the remaining staff for their co-operation during this difficult period.”