28 February 2015, News Wires – Accountants KPMG confirmed Friday that Specialist Subsea Services Limited (S3) has been put into administration amid cash flow difficulties. KPMG said that due to minimal work in progress at the firm and an absence of ongoing work, it had no option other than to make 77 of the company’s 82 employees redundant with immediate effect.
KPMG said S3, which has been trading since 2007, had recently undertaken the charter of an offshore support vessel (the EDT Hercules) and acquired two new remotely-operated vehicles (ROVs) and related equipment. This expansion, KPMG said, “significant increased” S3’s fixed cost base which, due to insufficient work levels, became difficult to service, resulting in cash flow difficulties. Management had been seeking new investment and were progressing a restructuring exercise.
S3 had secured a frame agreement, and initial call off, with a major subsea engineering and construction company. However, KPMG said that, following the insolvency of S3’s parent company and largest customer, the company’s cash flow issues intensified and new investment could not be secured in time to meet the company’s liabilities. The appointment of administrators was therefore necessary.
The five employees who have been retained by the firm in order to assist the joint administrators to realize the company’s assets and to help market the business and assets for sale.
Blair Nimmo, joint administrator and head of restructuring for KPMG in Scotland, commented in a statement:
“The company is well known in the subsea services industry and has a significant infrastructure comprising several ROV systems together with significant subsea equipment, a customer base and intellectual property.
“We will do everything we can to seek a buyer who may be able to protect the business and which would maximise recoveries for creditors whilst also helping to maximize opportunities for the workforce. We would encourage any party who has an interest in acquiring the company’s business and assets to contact us as soon as possible.
“We will be working with the employees and the relevant government agencies to ensure that the full range of support is available to all those affected. We would like to thank the remaining staff for their co-operation during this difficult period.”