John Wood Group PLC has recommended that shareholders vote for the engineering and consulting company’s proposed acquisition by Sidara Ltd. at 30 pence in cash for each Wood share, according to a regulatory filing.
However, while subject to shareholder approval, the merger with Sidara is planned to be implemented as a court-sanctioned scheme under which Sidara’s offer would be binding on Wood shareholders irrespective of whether they voted for the acquisition, according to the London filing.
Dubai-based Sidara reduced its offer from 35 pence after conducting a “due diligence” review.
Aberdeen-based Wood has acknowledged it has not had a sustainable free cash flow since 2017 due to regulatory fines, loss-making contracts, restructuring charges and litigation payments.
Even as it works out a lifesaving deal with Sidara, it has run into further troubles with the United Kingdom Financial Conduct Authority (FCA) launching a probe into its accounting practices and the London Stock Exchange suspending its stock in May for failure to meet an April deadline to report audited accounts.
Sidara has agreed a capital injection of $250 million upon the approval of the merger by Wood’s shareholders and provide an additional $200 million upon the completion of the merger.
“The current capital structure of the Wood Group is unsustainable. When taking account of cash requirements in the business, Wood’s gross indebtedness is approximately $1.6 billion”, the filing said. “Wood’s liquidity to fund its ongoing operations is currently limited”.
Wood assessed other refinancing options but resolved Sidara’s offer ” represents the best option for its shareholders, creditors and wider stakeholders”, the filing said.
As part of the conditions for the acquisition, Wood eked out an “amendment and extension” agreement with lenders extending its committed debt facilities to October 2028. Some of the existing lenders also committed an immediate interim facility of $60 million.
A further committed $200 million New Money Facility will become effective at the same time as the Amendment and Extension and will be partly used to refinance the interim facility.
Wood also secured “a committed Existing Guarantee Facility of approximately $400 million governing guarantees issued and to be issued by certain lenders under the Existing Wood RCF which will become effective at the same time as the Amendment and Extension”, the filing said. The RCF refers to a $1.2 billion unsecured revolving facility signed October 2021.
In another condition for Sidara’s acquisition, Wood must publish its delayed audited accounts by October 31, 2025.
Last March Wood said it had received the draft of a review it commissioned from Deloitte for its January-June 2024 results. The independent review concerned exceptional contract write-offs relating to an exit from lump-sum turnkey and large-scale engineering, procurement and construction works.
Announcing receipt of the review, Wood, in a statement at the time, acknowledged “material weaknesses and failures in the group’s financial culture”.
Acting on the revelations, the FCA launched an investigation into Wood covering January 2023-November 2024, as announced by Wood June 27, 2025. It has assured “full” cooperation with the FCA. Wood has already made board changes.
Divestments
Since receiving Sidara’s proposal, Wood pursued divestments as part of efforts to work out an alternative way to stabilize its capital structure.
It initially targeted $150-200 million in divestment proceeds this year. That target is expected to be exceeded through an agreement announced July for the sale of its 50 percent stake in JWG Investments Ltd. to Siemens Energy Global GmbH & Co. KG and an agreement announced last week for the sale of T&D Engineering to Qualus Corp.
Under the latest sale, Wood will give up its North American power transmission and distribution engineering business.
Wood has agreed a total of $275 million in asset disposals this year.
To contact the author, email jov.onsat@rigzone.com
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