French offshore services company Bourbon has requested for reorganization proceedings of approximately 900 million euros in liabilities after a Chinese leasing company activated payment guarantes from the company.
The request for reorganization follows demands from Chinese company ICBC Leasing that Bourbon pay all outstanding rental payment guarantees up to 2026, as per its contract with Bourbon. On Wednesday, the Commercial Court of Marseilles rejected the Bourbon’s request to enter “safeguard” proceedings which would have protected Bourbon from making the payments. As a result of the ruling, Bourbon has become insolvent.
In a statement, Bourbon said the calls on guarantees from ICBC Leasing were made despite the ongoing amicable negotiations on the financial restructuring of its bank and lease debt.
Bourbons says the reorganization proceedings are a collective procedure that freezes the liabilities existing at the beginning of the procedure during an “observation period” which can last up to 18 months. The purpose of the procedure is to enable a debtor to present a plan for the continuation of his activities by reorganizing its debt to ensure recovery.
The company listed liabilities of approximately 900 million euros.
Bourbon said the reorganization proceedings will only concern the holding company BOURBON Corporation and not the operating companies, which will be able to continue their normal operations and continue to meet the needs of customers.
“BOURBON Corporation’s aim is to preserve the Group’s operating activities in order to actively participate in the emerging recovery of a profoundly changing market,” Bourbon said in a statement. “BOURBON is thus continuing the radical transformation of its business model, with the deployment of the #BOURBONINMOTION strategic action plan.”
Bourbon’s fleet is one of the largest and most modern in the offshore oil and gas services sector, comprising of more than 483 vessels and 31 operating affiliates.