Job losses at Thornaby offshore firm as Reef Subsea UK collapses into administration

Staff at a Thornaby offshore firm have been made redundant after administrators were called in.

Around 43 of Reef Subsea UK Limited’s 70 employees have lost their jobs.

It comes just over a month after the marine trenching firm’s Teesside operation insisted it was not in administration, following the demise of its Norwegian parent company.

Accounts for Reef Subsea UK, a separate legal entity to Norwegian-based Reef Subsea AS, show the company made a post-tax loss of £15.9m in 2013.

Administrators Dan Butters and Adrian Berry of Deloitte were appointed to Reef Subsea UK on March 3 and continue to trade the business to preserve its main contract whilst assessing options.

The pair confirmed the options included progressing interest from potential buyers.

Dan Butters said: “Following the bankruptcy of the wider group, the directors have sought to secure the survival of the business.

“These efforts are ongoing whilst the Administrators trade the business but unfortunately we have had to make a number of redundancies today in order to reduce ongoing costs. Our specialist team is supporting those employees affected.”

Last year Reef Subsea AS restructured to form three independent business — X-Subsea, Reef Power & Umbilical and Technocean Subsea.

Reef’s chairman Mel Fitzgerald was reported in the Norwegian press as saying recent market deterioration caused by low oil prices had scuppered the turnaround efforts.

Speaking to the Norwegian newspaper, Dagens Næringsliv, Mr Fitzgerald, said: “We have worked intensively in recent years to restructure the company and reduce costs and competition.

“The recent deterioration in the market has made that we have not succeeded. We have tried to find solutions together with the central shareholders, but unfortunately we have not managed to get agreement that restructures the company.”

In its 2013 accounts Reef Subsea UK said it was looking forward to becoming a “major player and market force” in 2016 and 2017, despite post-tax losses of £15.9m.

Late last year the Teesside firm announced it had completed work on the Gwynt y Môr Offshore Wind Farm – its largest contract to date.

In its 2013 accounts, Reef Subsea UK said the contract had been made difficult initially by poor conditions, a feature which had contributed to the significant losses.

Reef’s Stockton operation was launched in 2012 with the backing of its Norwegian group.