A Scottish court on Thursday upheld a “company voluntary arrangement” (CVA) between Petrofac Ltd and creditors, in a challenge by United Kingdom tax authorities.
The CVA regarding claims by certain creditors would allow the energy engineering company, under administration since last year, to complete the sale of its Asset Solutions business to CB&I, according to Petrofac.
The creditors voted for the CVA January 30. The affirmative represented 99 percent of creditors voting and 86 percent of the value of claims, Petrofac has said.
Among the creditors covered by the CVA is HM Revenue and Customs (HMRC), according to an online statement by Petrofac on Thursday announcing the ruling in the challenge. The tax agency sought to block the CVA to enforce the government’s claim for historical National Insurance Contributions (NICs) for offshore workers from October 1999 to April 2014, according to an online statement by Petrofac March 2. Petrofac disputed the HMRC claim.
In Thursday’s statement, Petrofac insisted, “The sale [to CB&I] represents the outcome of a lengthy market testing process and the administrators of Petrofac Ltd believe that the transaction is on the best possible terms that can be achieved for all creditors including HMRC”.
“Petrofac has today asked HMRC to confirm that they will not further challenge the CVA, as ongoing appeals may further delay completion of the transaction”, added the statement on Petrofac’s website.
“Petrofac is also seeking the support of both the UK and Scottish government to facilitate the swift completion of the sale to CB&I, for the benefit of all stakeholders”.
Rigzone emailed HMRC a request for comment on the ruling in its challenge.
The CVA excludes “trade creditors, employees and certain other parties”, according to a Petrofac statement January 15.
The sale of one of its businesses to CB&I – a maker of storage facilities, tanks and terminals based in The Woodlands, Texas – would save jobs for around 3,000 Petrofac workers, according to the agreement that the transaction parties announced December 24, 2025.
“The consideration for the sale has been agreed on a debt-free, cash-free basis”, Petrofac said then. “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 at the time.
To contact the author, email jov.onsat@rigzone.com
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