UK’s Petrofac to now include Middle East–linked unit into administration

Dubai: Petrofac moved today to extend its court-supervised insolvency process beyond its UK parent company, announcing plans to place Petrofac International Limited (PIL) into administration — a significant shift after the group repeatedly said overseas operations were continuing as normal.

PIL will appear before the Royal Court of Jersey on November 28 to request a letter enabling the High Court of England and Wales to appoint administrators, the parent company said in a statement on Tuesday evening.

PIL historically managed a large share of Petrofac’s Engineering & Construction activity in the Middle East and North Africa. The group said the entity now holds no active contracts and confirmed its intention to retain staff where possible. “The Group intends to redeploy PIL’s 120 staff to other Group companies wherever possible,” the statement said.

Petrofac said its Executive Management is working with administrators of the holding company “to preserve value, operational capability and ongoing delivery across the Group’s operating and trading entities.”

Turning point

When the holding company entered administration on October 28, Petrofac stressed the measure was limited to the parent entity. Trading subsidiaries — including international operations — were described as unaffected, with the group focused on maintaining delivery across its businesses.

Today’s development marks the first time Petrofac has sought to bring a major part of its overseas structure into the same process.

In the latest statement, Petrofac said the purpose of the application is “to ask the Royal Court of Jersey to issue a letter of request to the High Court of England and Wales and seek its assistance in appointing administrators to PIL.”

If granted, PIL’s directors will immediately apply to the High Court in London.

MENA implications

Petrofac framed the step as part of the wider restructuring strategy. Bringing PIL into administration “is expected to facilitate the purpose of Petrofac Limited’s administration, to help preserve the value of the wider Group and to facilitate the planned M&A solutions.”

Petrofac’s restructuring intensified in October after TenneT terminated the company’s full scope of work on the Dutch 2GW offshore grid programme. The group said the decision made its near-final restructuring plan “no longer deliverable,” triggering attempts to find alternative solutions.

On October 27, directors applied to the High Court to appoint administrators to the holding company. Creditors provided forbearance and rolling maturity extensions as discussions continued. The following day, Petrofac’s shares were delisted from the London Stock Exchange.

The company has maintained throughout that operations across its trading entities remain active.

Next steps for Petrofac?

Petrofac said the group continues to trade across its operating businesses. “The Group’s operations will continue to trade. Petrofac continues to advance options for alternative Restructuring and M&A solutions with key creditors,” it stated.

The November 28 hearing in Jersey now becomes the next decisive moment. A letter of request would open the way for PIL to enter administration in England, drawing part of the company’s international structure formally into the insolvency process alongside the UK parent.

Petrofac said further updates will be issued “as appropriate.”