Isra-Mart srl:Subocean struggles to keep head above water

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Isra-Mart srl news:

A company hailed as one of Scotland's most promising wind energy specialists is fighting for survival this week, after suspending installation work on a major UK offshore wind farm in a bid to avoid going bust.

Subocean Group, which specialises in installing and burying cables on UK offshore wind farms, last week entered a period of moratorium after filing a notification to the Court of Session in Edinburgh.

The moratorium is designed to protect the company while the directors work to find a financing solution, which could involve a new buyer or investor.

A spokeswoman told BusinessGreen that the company has now suspended construction work on the 500MW Greater Gabbard and Baltic 1 offshore wind farms while the moratorium is in place. However, staff will continue to work from its offices.

She confirmed the group, which employs 320 people, is talking to potential investors or buyers that could acquire the company as part of a re-financing solution.

However, she counselled that it was too early to predict when or if a deal would be announced.

"The directors, who are working tirelessly on re-financing the business, firmly believe that these discussions are in the interests of the staff, creditors and stakeholders of the business," she said.

A source close to the deal described Subocean's problems as symptomatic of the nascent industry. Only last month Subocean was listed as the second the fastest growing businesses in the UK. However, the company has struggled to keep up with its demanding schedule, the source said.

Subocean employs 120 people onshore and around 200 contractors offshore. It has installed cables on several major projects, including the world's largest offshore wind farm, Thanet, off the Kent coast.

Mike Rumbles MSP for West Aberdeenshire and Kincardine urged the Scottish government to intervene telling The Scotsman newspaper that there was a strong case for the government to offer financial assistance. "Subocean is an important local employer," he told the paper. "I would call on the Scottish Government to provide any assistance it can to help Subocean at this time."

The news will come as a further blow to UK's nascent wind energy industry. Earlier this month, Danish company Skykon filed for insolvency at its wind turbine plant near Campbeltown because it was "strapped for cash".

Subocean's problems also serve to highlight the fragility of the UK's emerging wind turbine supply chain, echoing the warnings of industry insiders who say that without the appropriate investments, the supply chain could fail to ramp up in time to build the next generation of offshore wind farms by 2015.

In related news, RWE npower yesterday awarded a €240m contract to a Danish/German consortium which will manufacture foundations for the 576MW Gwynt y Môr offshore wind farm in Liverpool Bay.

The specialist consortium of Bladt Industries and EEW Special Pipe Construction are slated to deliver the first foundations to the North Wales coastline in late 2011 for installation shortly after.