Petrofac Enters Administration Following Collapse of Restructuring Plan

Petrofac Limited, the London-listed engineering and energy services group, has entered administration after its months-long restructuring effort collapsed in the wake of a major contract termination, with Teneo appointed administrator. The move follows the Court of Appeal’s earlier decision to overturn sanction of Petrofac’s UK restructuring plan—an outcome that sent the company back to the negotiating table with creditors Saipem and Samsung, whose objections had triggered the appeal.

Petrofac had been working toward a revised restructuring that aimed to be completed by the end of November, with discussions centring on a lock-up agreement that would have converted more than US$3.9 billion in secured and unsecured liabilities into a new capital structure. But in a series of announcements between 1 and 27 October, the group disclosed that shifting stakeholder positions and the sudden termination by TenneT of its 2 GW offshore wind programme rendered the plan “no longer deliverable in its current form.”

On 27 October, Petrofac’s board confirmed that it had applied to the High Court to appoint administrators to Petrofac Limited, its ultimate holding company, describing the process as a “targeted administration.” Trading in the group’s shares was suspended, and the London Stock Exchange formally cancelled Petrofac’s listing the following day. The company noted that operations across its trading subsidiaries would continue uninterrupted while administrators work alongside management to preserve value and explore alternative restructuring and M&A solutions with the group’s Ad Hoc Group of noteholders, RCF and term loan lenders.

The administration caps a dramatic turnaround from the company’s earlier efforts to stabilise its balance sheet following the Court of Appeal’s rejection of its original restructuring plan, which had been found to unfairly allocate equity value to new money providers. While creditors had initially shown willingness to pursue a consensual solution, the loss of the TenneT contract—reportedly worth hundreds of millions of pounds—undermined confidence in the group’s recovery prospects and accelerated the shift toward formal insolvency proceedings.

Petrofac’s case now stands as a cautionary example of the limits of judicial restructuring in complex cross-border energy projects. With administrators now in control and equity wiped out, the group’s future likely hinges on the outcome of ongoing creditor negotiations and potential asset sales—an outcome that few would have predicted just months ago, when Petrofac’s plan was being hailed as a test case for fairness in English restructuring law.