Oceanteam fails to secure financing

Oceanteam has not been able to clinch financing for its planned East-West interconnector linking the electrical grids of the UK and Ireland, as the Norwegian offshore company's financial problems continue to mount.

London: The company, which has been buried beneath an avalanche of losses on project work at offshore wind farms over the past several months, turned in an operating loss of Û35.5m ($50.3m) for the first quarter of 2009. The company lost Û3.2m during the same period last year.

Through its Irish subsidiary, Imera, Oceanteam had planned to build a Û225m electrical interconnector running 135km from Arklow, County Wicklow in Ireland to Pentir, North Wales.

Though Oceanteam has long insisted the cable would be finished by 2010, it now acknowledges that it has not been able to gain the financial backing needed to take the project forward. Interconnectors linking the electrical grids of EU countries are seen as a crucial step in the development of Europe's renewable-energy industry. With EU countries mandated to derive a certain percentage of their electricity from renewables by 2020, interconnectors will allow renewables powerhouses - from Scotland to Spain - to export green electricity to their 'browner' neighbours. In April, Oceanteam announced it was abandoning all project work in the offshore renewables industry after being forced to make massive write-downs on wind farms including Rhyl Flats, Gunfleet Sands and Alpha Ventus. After swallowing the biggest quarterly loss in its history, Oceanteam now intends to focus solely on the chartering of its vessels and equipment for offshore work. The company says it expects to see slowed growth in the markets for offshore renewables, offshore grids and power interconnectors, with "projects being delayed or reviewed in view of the new market circumstances". Oceanteam says it continues to languish beneath a "burdensome financial structure", with a bond loan of NKr800m ($129.3m) set to mature in June 2010, and a large number of short-term creditors looking for repayment.

Oceanteam has decided to stop funding its UK subsidiaries, Oceanteam Power & Umbilical and Oceanteam Subsea Services.