More than 2,000 North Sea jobs have been safeguarded after HM Revenue & Customs agreed not to pursue further legal action against a restructuring deal involving Petrofac, clearing the way for the sale of its UK business to US engineering firm CB&I.
The decision removes a major obstacle that had threatened to derail the transaction and push Petrofac’s North Sea operations into insolvency, with potentially severe consequences for workers, supply chains and energy infrastructure.
HMRC had been seeking to recover more than £150 million from Petrofac relating to a long-running tax dispute, and had argued that the proposed debt restructuring was unfair because it would leave the tax authority with just £3 million, while other creditors stood to recover a greater proportion of their claims.
However, Scotland’s Court of Session rejected HMRC’s challenge earlier this month, and the tax authority has now confirmed it will not appeal that ruling. The move effectively clears the path for completion of the rescue deal, which is contingent on significant debt write-offs across the group.
Petrofac had warned that without swift resolution, its UK asset solutions division, which employs around 2,250 people and operates approximately 20 North Sea platforms, was at risk of running out of cash and collapsing.
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