SeaEnergy said it is looking to sell parts of the business after trading had been rocked by a further downturn in sentiment in the oil and gas sector.
The offshore energy services business said that since acquiring the Return to Scene (R2S) business in August 2012, progress towards group profitability had been good until the collapse in the oil price in late 2014, which prompted many customers to delay or cancel new projects.
Things looked like they were picking up in late 2015 but then trading in the oil and gas industry took another turn for the worse, resulting more cancellations and delays.
SeaEnergy has striven to reduce costs and exit unprofitable areas, but the group said it is still generating losses, while the loan facilities announced in November 2015, which were intended to tide the company over until things improved, have proved to be insufficient and the company’s cash position is becoming tighter.
The board believes that the longer term prospects for R2S software and services remain positive, but any short term improvement in performance would require a rapid upturn in the oil and gas market. Given the uncertainty over the timing of such an upturn and the current working capital position, the board is in discussions with a number of parties who have expressed an interest in the acquisition of the R2S Visual Asset Management business and/or other assets of the group.
SeaEnergy issued the usual caveat that there is no guarantee any sale will take place but if a disposal is agreed it would likely be classified as a fundamental change of business under Aim rules and require the approval of shareholders.
By John Harrington
Source: Proactive Investors
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