Hopes are rising for the future prospects of the 400 people who work for troubled Aberdeen-based Sovereign Oilfield Group.
A preferred bidder has now been identified following administrators being called in on Wednesday, February 24.
The possible new owner’s identity has not been disclosed, but is understood to be Global Energy (Holdings), which has main offices in Aberdeen and Inverness.
Joint administrator Bruce Cartwright, of PricewaterhouseCoopers, said yesterday: “We are in confidential discussions with a preferred party and these discussions are progressing well.”
A spokesman for Global declined to comment.
After Mr Cartwright was appointed last month, there was optimism that most, if not all, of the jobs could be saved if a buyer was found quickly for the group’s four main fabrication businesses: three of them in the Aberdeen area and the fourth based at Dunfermline.
The administration only involves the holding company, not Sovereign’s operating subsidiaries which are trading as normal.
Sovereign has been in the news frequently because of its problems.
In January, its shares plunged by 50% on the day it told investors it was uncertain its future trading performance would be able to support its debts.
Sovereign also said the board was reviewing its strategic options, which included a debt-for-equity swap, a capital injection, and disposals of some or all of its operating subsidiaries.
Mr Cartwright and colleague Graham Frost were appointed joint administrators at the request of the board.
Earlier that same day, Sovereign received enforcement orders from creditors.
It has sold subsidiaries and properties in the past couple of years to raise money to reduce its debt and in line with its strategy of refocusing as a fabrication business.
The group revealed in December it made pre-tax losses of £3.3million in the six months to September 30, against a pre-tax deficit of £1.8million a year earlier.
Meanwhile, in the year to last March, Global recorded sharply increased sales and profits.
Its latest annual report, released recently by Companies House, showed it made pre-tax profits of £9.37million for the year, up from £5.86million the year before.
Turnover for the period was £119million, up 26% on the previous 12 months.
Directors of the family-owned firm, whose chairman Roy MacGregor is a former chairman of Ross County FC, one of Global’s subsidiaries, said in their report that the group had an aggressive strategy of organic expansion and acquisition. They added that the aim was to double turnover within three years.
They also said that during the year the group was reorganised into six business streams:- subsea, offshore, power and process, renewables and utilities, supply chain and resources.
Looking to the future, the directors said they were committed to growing the business and would continue to internationalise operations.
Global plans to build a large fabrication shed at Invergordon harbour to secure 220 jobs and provide the potential for 700 more.
The shed is needed to replace Global’s existing facility at the Nigg yard where its lease runs out at the end of May. The Nigg facility is used by Evanton-based Isleburn, part of Global.
