Oilfield services investment company, Akastor, has confirmed that its wholly owned portfolio company MHWirth will axe its global workforce due to deterioration in the rig market.
Namely, in February this year, MHWirth announced it will be reducing its workforce between 500-750 people. In line with that announcement, Akastor today informed that 750 jobs will be cut and that, in connection with downsizing, the company will take a restructuring charge of 40 million in the first quarter.
Furthermore, Akastor said that restructuring process, market uncertainty and project delays have had a negative impact on MHWirth’s first quarter results.
“The combination of these factors together with the current market environment has resulted in an expected EBITDA result for MHWirth in Q1 2015 of NOK 43 million, excluding the restructuring costs of NOK 40 million,” said Akastor in a statement.
Akastor was established as a separate listed company on Oslo Stock Exchange in September 2014, following the split of Aker Solutions into two separate companies.
The company has six reporting segments: MHWirth, Frontica Business Solutions, AKOFS Offshore, KOP Surface Products, Fjords Processing and Real Estate & other holdings.
Akastor recorded a net loss for the fourth quarter 2014 of NOK 502 million and has now noted a drop in MHWirth’s productivity due to restructuring process. MHWirth is the largest by revenue out of six Akastor’s subsidiaries.
Akastor also reported that the Group’s net debt has increased by about NOK500 million on account of the strengthening of the dollar against the Norwegian krone.