Press Association
Saturday 13th March 2010
Oil platform engineer SLP has called in administrators after suffering amid a lengthy contract row over a previous major construction project, it has been announced.
The group employs 876 staff across its sites based at Lowestoft in Suffolk, Tyneside, Blackpool and New Malden, Surrey.
Administrator PricewaterhouseCoopers (PwC) said it had made 45 staff redundant in Lowestoft, but would retain a "significant proportion" to work on an ongoing project with BP that will continue.
SLP was put under "significant financial strain" after being embroiled in a customer dispute, which is still unresolved, according to PwC. The disagreement revolves around work completed on the Al Shaheen field development project in Qatar for shipping and oil giant Maersk, which alleges that SLP failed to honour its contractual obligations - a claim rejected by SLP.
The continuing row has hit the group financially in terms of legal costs and by dealing a blow to its reputation with customers, according to PwC.
Stephen Oldfield, joint administrator and advisory partner at PwC, said: "With SLP's prospective customer base being aware of its significant contractual dispute, the level of new work at SLP in recent months has been significantly reducing.
"Whilst we have been successful in securing one major customer and hope shortly to secure others, we have unfortunately been left with no choice but to reduce the management staffing at Lowestoft by 45 with immediate effect."
The administrators will look to retain as many existing customers as possible, but they said talks will "not be easy".
They will also look to secure a buyer while delivering the BP project.
"We will be discussing the position with the workforce, employee representatives and unions so they are kept abreast of the position as customer discussions unfold in the coming days," said Mr Oldfield.
