(Update) March 4, 2025, 5:20 AM GMT: Article updated to make it clear the challenge concerns the CVA and not directly Petrofac’s deal with CB&I.
Petrofac said Monday the United Kingdom’s HM Revenue and Customs (HMRC) has applied to challenge a “company voluntary arrangement” (CVA) with creditors related to the pending sale of the energy engineering company’s Asset Solutions business to CB&I.
The CVA regarding claims by certain creditors would allow Petrofac, which has been under administration since last year, to complete the divestment to CB&I, according to Petrofac. Creditors voted in favor of the CVA January 30.
“The CVA challenge is connected to a claim by HMRC against Petrofac Facilities Management Ltd for historical National Insurance Contributions (NICs) for offshore workers from 6 October 1999 to 5 April 2014”, Monday’s statement said. “Petrofac disputes the entirety of the NIC claim, which is yet to be determined by a court.
“The issue of retrospective NICs is not unique to Petrofac and HMRC is pursuing similar claims against other companies in the industry.
“Petrofac is reviewing the CVA challenge with advisors and CB&I, who remain supportive, and is working to address the challenge in the shortest possible timeframe.
“As a result of the CVA challenge, it is expected there will be a delay in completion of the sale of Asset Solutions to CB&I”.
The CVA excludes “trade creditors, employees and certain other parties”, according to a Petrofac statement January 15.
“The agreed sale of Asset Solutions to CB&I is a strong outcome for the business and for around 3,000 colleagues who are expected to move across on completion”, Petrofac Asset Solutions chief operating officer John Pearson said then. “After more than two years of restructuring, this CVA is the final step to deliver that outcome, and we are asking creditors to support it so the sale can complete”.
Petrofac and CB&I, a maker of storage facilities, tanks and terminals, announced their agreement December 24, 2025.
“The consideration for the sale has been agreed on a debt-free cash-free basis”, Petrofac said at the time. “The ultimate net proceeds from the transaction will depend on the quantum of various deductions which will only be confirmed closer to completion. However, the administrators of the company expect the net proceeds to be in the range of $45m to $55m”.
“The net proceeds will be distributed to the secured creditors in accordance with the intercreditor agreement entered into between the company and the secured creditors on 26 October 2021”, Petrofac added.
“Petrofac continues to advance options for alternative restructuring and M&A solutions with respect to Petrofac Emirates, its UAE-based operating division, focused on engineering and construction activities in the UAE and internationally”, it said.
On October 23, 2025 Petrofac announced the end of its “advanced stage” restructuring after European grid operator TenneT terminated Petrofac’s scope under a March 2023 contract for six connection projects on the Dutch and German sides of the North Sea, each with a two-gigawatt capacity.
On October 27, 2025 Petrofac said it had applied for administration before the High Court of England and Wales. “This is a targeted administration of the Group’s ultimate holding company only [Petrofac Ltd]”, Petrofac said.
“The Group’s operations will continue to trade, and options for alternative restructuring and M&A solutions are being actively explored with its key creditors, including the Ad Hoc Group of Noteholders, who are supporting the Group with continued forbearance arrangements whilst alternative options are explored. The Group also retains the support of its RCF and Term Loan lenders who continue to extend maturities on a rolling basis.
“When appointed, administrators will work alongside executive management to preserve value, operational capability and ongoing delivery across the Group’s operating and trading entities”.
On October 28, 2025 Petrofac stopped trading on the London Stock Exchange after entering into administration.
To contact the author, email jov.onsat@rigzone.com
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