HMRC drops Petrofac CVA challenge paving way for CB&I sale

Petrofac has secured a decisive breakthrough in its restructuring efforts, with HM Revenue and Customs confirming it will not pursue an appeal following the Scottish Court’s rejection of its challenge to the company’s proposed Company Voluntary Arrangement, clearing the way for the sale of its Asset Solutions division to CB&I. The decision removes a major obstacle to completion of the transaction, which had been contingent on the CVA taking effect.

Petrofac entered administration in late October 2025, with James Bennett and Matthew Cowlishaw of Teneo appointed as joint administrators after its restructuring collapsed following the Court of Appeal of England and Wales overturning its restructuring plan and the termination of a major TenneT contract, derailing negotiations to convert more than US$3.9 billion of debt and forcing a targeted insolvency process.

In December 2025, it was announced that Texas-based CB&I had agreed to buy Petrofac’s asset solutions business out of administration. Petrofac presented a narrowly-scoped CVA affecting only certain creditors, leaving employees and trade partners unaffected, and paving the way for around 3,000 staff to transfer to CB&I. The CVA received overwhelming creditor backing at a meeting on 30 January 2026, securing approval from 99% of voting creditors and representing 86% by value of claims.

HMRC formally challenged the CVA, but the Court dismissed the challenge on 12 March. On 25 March, Petrofac announced that HMRC had confirmed that it will not appeal the decision, providing finality and removing an obstacle to implementation. With litigation risk now removed, Petrofac and CB&I are moving to complete the transaction as quickly as possible. The company has also sought support from both the UK and Scottish government to facilitate a smooth closing process.