Fife-based Burntisland Fabrication, which builds equipment for the offshore oil and gas industry and platforms for renewables, has announced that it is set to appoint administrators, as it looks at all the options to continue to trade. The firm employs more than 600 people who are now fearful of their jobs. The union has started discussions and has asked the Scottish Government to intervene.
BiFab secured a £100m contract in 2016 for the manufacture of 26 offshore wind turbine jackets from the Dutch contractor Seaway Heavy Lifting (SHL), part of the £2.6bn Beatrice Offshore Windfarm Ltd (Bowl project in the Outer Moray Firth led by energy giant SSE.
A statement from BiFab said it was "currently facing a critical cash position as a result of a challenging situation regarding its ongoing contracts".
Managing director Martin Adam added: "We are very disappointed that we have found ourselves in the current position which has arisen as a result of a challenging situation in respect of our ongoing contracts which have been providing much-needed employment locally in Scotland.
"We are seeking a rapid solution with our key stakeholders and the Scottish Executive to our current cash flow possible”
BiFab was set up in 2001 by the late John Robertson. It flourished until the boom in North Sea oil ran out. Switching to be involved in the offshore wind turbine industry appears to have been the source of the financial problems. The £100m deal to build 26 jackets for the Beatrice project in the Moray Firth, for final delivery by next April was not achievable it seems.
By filing a “notice of intention to appoint administrators” they have in effect stopped creditor pressure for 10 days while they try and find a buyer for the business or some other way of continuing to trade. There may have been a threat of a winding up petition on the company. Filing a notice can stop petitions.
This is the latest in a long line of businesses in the renewables sector that appears to have had financial difficulties. The loss of subsidies and the reduction of the feed-in tariffs has put pressure on the sector as a whole.