Birgitte Karlsen - Wikborg Rein
Shipping and offshore specialist law firm Wikborg Rein says current low oil prices could mean there are bargains to be had for investors in the offshore sector who follow recommended procedures for assessing and acquiring distressed companies.
Birgitte Karlsen, a partner in the London offices of Wikborg Rein, says, “The prolonged period of low oil prices, combined with reduced investment and contract awards, is taking its toll on oil service companies in the North Sea and elsewhere. For some, this may be a time of opportunity when bargains can be had, generating attractive rewards for cash-rich investors. But it is important to be aware of the risks involved in trying to acquire distressed businesses.
“These days, oil service companies may be in varying stages of distress, ranging from a negative cashflow situation through to default, with a formal court-appointed debt restructuring or bankruptcy process in place. Time is of the essence as the distressed business either has an immediate need for assistance and funding or has already defaulted on its obligations.”