Owing to ongoing volatility in the oil industry, Cape Town-based DCD Marine, which forms part of DCD Group, has entered voluntary business rescue.
The company took the decision following 18 months of “very difficult trading conditions” and business rescue practitioners Neill Hobbs and Justin Gordon from Hobbs Sinclair have been appointed to administer the process.
“DCD Marine was focused predominantly on the oil and gas market, which has contracted massively owing to low global oil prices. The business rescue process allows the business some room to negotiate with stakeholders, so it can take appropriate actions that put the business in a more positive position,” DCD Group CEO Digby Glover said in a statement.
He added that DCD Group was aiming to give the DCD Marine business the best possible chance of trading through these difficult conditions.
“The intention is to keep the business alive and to save jobs; if there was no chance of DCD Marine making it through this difficult time, the business rescue route could not have been taken,” he added.
Glover further said that market conditions had forced DCD Marine to revert its focus to the ship repair and industrial markets, which were more consistent but smaller in scale – leading to a contraction within the business.
DCD Marine’s roots in the ship repair market go back over a century; established in 1903, the company’s facilities are equipped to undertake turnkey repairs and upgrades on vessels such as drill ships, semisubmersible drilling rigs, offshore support vessels and pipe-lay vessels.
“While it is of course a serious concern for DCD Group that one of our companies must undergo this process, the group looks forward to DCD Marine coming out stronger than before. We have every reason to believe this will be the case,” Glover said.