SURF and heavy subsea construction contractor Ceona and Ceona Services (UK) Ltd have gone into administration in the UK, having been hit by the depressed subsea market caused by the low price of Brent crude oil.
The group has ceased trading and 102 employees will be made redundant from the firm, which was headquartered in London but had offices in Aberdeen and Houston.
“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,” said Ernst & Young’s Alan Bloom, joint administrator of Ceona Investments Limited and Ceona’s UK-based group companies.
“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.”
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, Ernst & Young said.
At the start of this month, Norways’s GC Rieber Shipping terminated the contract for its subsea construction support vessel Polar Onyx, which was charter to Ceona, after the London-based company defaulted on a payment.
Polar Onyx began a five-year charter to Ceona in March 2014 and was employed in advanced deep-water operations with Petronas in Brazil.
“GC Rieber Shipping 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 Shipping said in an exchange filing today.
Ceona’s chairman, John Smith, stepped down in August due to ill-health. The company’s majority shareholder is Goldman Sachs Capital Partners.