Fletcher Shipping taken into administration - buyer foundCompany News // August 25, 2015
Alan Brown and Bruce Cartwright of PwC were appointed as joint administrators of Fletcher Shipping Ltd, a Portlethan-based offshore vessel owner earlier this month, and have announced that a buyer has been found for the business.
Established in 2007, Fletcher Shipping Ltd provided offshore supply vessels to exploration and production firms operating predominately across the North Sea.
The fall in the global oil price and the subsequent reduction in oil exploration and similar activities in the North Sea has impacted the market for offshore supply vessels, as the UK industry increased its focus on cost reduction. As a result, Fletcher Shipping encountered significant cash flow difficulties in early 2015.
Against this backdrop, and recognising its cash flow challenge, the firm engaged with its lenders and sought a sale within the trade and financial investor community.
Following the appointment, the administrators confirmed the sale, as a going concern, of Fletcher Shipping Ltd to FS Shipping Ltd, securing the future of the predominantly British crews contracted to operate the vessels.
Alan Brown, PwC director and joint administrator, said: “The drop in oil price from US$110 to a low of US$45 a barrel, before rallying at US$60 has undoubtedly impacted business confidence across the North Sea basin with the result that the daily vessel supply spot rate has been squeezed down from around £18,000 a day to nearer £3,000 - an 83 per cent drop.
“The last few weeks have seen an intensive period of activity as we worked with Fletcher Shipping Ltd and their stakeholders to find an optimal solution.
“Following our appointment, we are delighted to have achieved immediate completion of an accelerated sales process of the business and assets of Fletcher Shipping Ltd to FS Shipping Ltd, ensuring continued stability for the self-managed crew, suppliers and clients across the oil and gas industry.”
The sale has resulted in four Ulstein-designed and British registered PSVs - FS Aquarius, FS Pegasus, FS Taurus, and FS Pisces - transferring to the new owner alongside associated operating machinery, plant and office equipment. Management were advised by KPMG.