Scottish OSV operator Fletcher Shipping has been forced into administration by a local court again, only two years after it was brought back from the brink of oblivion.
Fletcher Shipping went into administration in 2015. It managed to resume operations after securing $18m in financing from private investment firm Grovepoint Capital, and all of the company’s vessel assets, including four OSVs, were transferred to a new company called FS Shipping.
According to a notice by UK’s High Court of Justice from late last week, the court appointed business advisory firm Deloitte as the administrator of FS Shipping on September 1.
Currently Fletcher Shipping’s four OSVs – FS Pegasus (built 1996), FS Cygnus (built 2014), FS Pisces (built 1992) and FS Taurus (built 1991) – have all been laid up.
In an email statement, Deloitte’s Michael Magnay, joint administrator of FS Shipping, told Splash that FS Shipping’s cash position had deteriorated over recent months as a consequence of the prolonged downturn in the oil and gas sector, suppressed demand for vessels and the resultant erosion in charter day rates.
“In response the directors had taken proactive steps to reduce the cost base, including laying up three of the company’s four vessels, but with securing long-term viable contracts continuing to prove a challenge, the directors have reluctantly taken the decision to lay up the remaining vessel, the FS Pegasus, resulting in the immediate cessation of trade. Our efforts will be focused on finding buyers for the vessels,” said Magnay.
Accoring to Deloitte, the administration appointment impacts only FS Shipping, and other entities within the Fletcher Group continue to trade unaffected.