The Bergen Group said Friday that its rig service subsidiary Hanøytangen will file for bankruptcy in Norway following a dispute over the Borgland Dolphin project, the second of the company’s subsidiary to do so this month.
The company started arbitration proceedings against the owner of the semi-submersible Borgland Dolphin drilling rig in August.
In its second quarter results, Bergen said it did not receive final payment for the rig’s extended stay at the company’s Askøy yard that took place from October 2014 through February 2015, Splash 24/7 noted.
“The company has over time experienced a strained liquidity situation due to the ongoing dispute over the final settlement of the rig project Borgland Dolhin completed in Q1 2015,” Bergen said.
Bergen Group Hanøytangen has filed a $22.9 million compensation claim for the extended stay and work performed on the rig, Splash 24/7 added.
The dispute will not be processed by the arbitration court until the second quarter of 2016.
The Bergen Group said its board of directors along with its external and internal advisers have “made substantial efforts” to reach a stand still agreement with the company’s creditors, pending the final settlement from the Borgland Dolphin project.
The company said that although the stand still agreement has won support from a “large” number of its creditors some creditors have objected.
The Bergen Group does not expect that an out of court agreement with its creditors will “gain sufficient support.”
“The company has considered filing for debt settlement proceedings, however, in light of the creditors’ attitude and the pending petition for bankruptcy against the company, this was not deemed as an appropriate action,” the company said.
Earlier this month, Bergen Group Skarveland AS had to file for bankruptcy in Norway due to a lack of new orders and disappointment financial results.
Bergen Group Skarveland AS had a total of 70 permanent employees at the end of August.