Oilfield services firm TechnipFMC has deferred its plans to split business operations into two separate entities. It has said the current market environment led to its decision to put separation on hold.
The oilfield services provider was to spin off into TechnipFMC (the remaining company) and Technip Energies (the spun-off company).
In a press statement, the company said: “Market conditions have changed materially due to the COVID-19 pandemic, the sharp decline in commodity prices, and the heightened volatility in global equity markets.
“The impacts of these events have created a market environment that is not currently conducive to the company’s planned separation into TechnipFMC and Technip Energies.
“The company reiterates that the strategic rationale for the separation remains unchanged. The company is committed to the transaction and continues its preparations to ensure that the two companies are ready for separation when the markets sufficiently recover.”
Technip Energies will focus on the company’s engineering and construction business. After the split, TechnipFMC will provide integrated technology and services to the oil and gas industry. It will remain incorporated in the UK, with headquarters in Houston.
The split’s completion must be approved by the EU Prospectus by the Dutch Authority for the Financial Markets (AFM). It is also contingent to general market conditions and other regulatory approvals.
Coronavirus worldwide impact
Meanwhile, the death toll from the virus has crossed 6,500 as of the end of 15 March. The recoveries have increased to about 77,200, with a total of more than 169,300 confirmed cases worldwide.
Global coronavirus cases continue to surge, as the current epicentre of the pandemic moves to Europe.
According to the World Health Organization (WHO), Europe is now reporting more confirmed cases and deaths than the remaining regions combined, except China.