Global Energy snaps up six Sovereign firms from administrator

Published on Tuesday 9 March 2010 20:17

THE fabrication division of Sovereign Oilfield Group, which slipped into administration last month, has been snapped up by Aberdeen-based peer Global Energy Group, in a move that is expected to save hundreds of jobs.

Six firms have been taken over in the deal that it is hoped will protect about 400 jobs in Aberdeen and Dunfermline.

The companies being acquired by Global Energy are Caledonian Petroleum Services, Cooltime Engineering Services, Forfab, Labtech Services, OIL Engineering and Sovereign Dimensional Survey.

Joint administrator Bruce Cartwright, who is head of business recovery services in Scotland at accountancy firm PricewaterhouseCoopers, said: "When we were appointed, it quickly became apparent that while this part of the Sovereign Group had a strong reputation for quality, it had become cash constrained within the business.

"We are delighted to have successfully concluded terms with Global Energy, a company with solid and strong credentials to take this division forward. It has been particularly satisfying to have reached this conclusion in ten days, preserving jobs in the Aberdeen and Dunfermline area in the process."

He added: "We remain committed to delivering a positive outcome with respect to the remaining trading entities within the drilling division."

Global Energy Group operates in locations across the Americas, Europe, Africa and Asia, and it employs a worldwide workforce of more than 2,500.

The firm provides support to engineering contractors across a wide range of sectors, from production and drilling to subsea, and power generation to utilities and renewables.

Roy MacGregor, Global's chairman, said: "All six companies add to and complement our existing portfolio of services. It was clear to us these are well established brands, with skilled people working in markets that have potential to develop and grow. However, it was equally important to really understand the nuts and bolts of the businesses.

"It has been difficult times for these companies over an extended period of time."

But MacGregor added: "It must be remembered these acquisitions were concluded in just over a week and so our concentration of effort and priorities, thus far, has been to secure the deal to protect the various companies' trading positions.

"We now need to take a closer look at each company, their facilities and their people, to establish a clear way forward."

Last month, administrators were appointed for Sovereign, which had been struggling to cope with debts accumulated in its drive for growth before the credit crunch.

The group had previously closed one loss-making subsidiary, precision engineering firm Fingolden.