Waldorf Production Wins UK Court Approval for Restructuring Against HMRC Pushback
High Court Ruling and Implications for Waldorf Production
LONDON, May 5 (Reuters) - North Sea oil and gas producer Waldorf Production's restructuring plan was approved by London's High Court on Tuesday, despite opposition from Britain's tax authority over the company's windfall tax liabilities.
Background of the Restructuring Plan
A previous restructuring plan was rejected by the High Court last year, after which Harbour Energy agreed to acquire subsidiaries in the Waldorf Group for about $170 million.
Terms of the Harbour Energy Acquisition
The terms of Harbour's acquisition required that certain liabilities were restructured, including more than $94.4 million owed to Britain's tax authority HMRC under a windfall tax on profits between 2022 and 2024.
HMRC's Opposition and Arguments
HMRC argued that Harbour wanted to use the Waldorf Group's tax losses – which it said in March were worth up to $900 million – to shield its own profits, while 14% of Waldorf's windfall tax liabilities were paid.
Court Decision and Reasoning
But Judge Michael Green approved the restructuring plan, saying in a written ruling that HMRC would be "better off under the plan" than in the most likely alternative to the plan.
Potential Outcomes for HMRC
He said that Waldorf would most likely be wound up and HMRC would receive just 0.1% of the windfall tax liabilities, while the companies with the most valuable tax losses would be sold and those losses would be utilised by the purchaser.
Considerations on Decommissioning Liabilities and Tax Losses
He also said that Harbour was assuming Waldorf's decommissioning liabilities and would not necessarily be able to utilise all of Waldorf's tax losses.
Industry Volatility
"The oil and gas industry is highly volatile, as we have seen in recent weeks, and financial results can fluctuate widely," the judge said.
Reactions from Key Stakeholders
HMRC Response
An HMRC spokesperson said: "We note the decision of the court and are carefully considering our next steps."
Harbour Energy Statement
A Harbour Energy spokesperson said: "We welcome the ruling and remain confident the transaction will complete in the coming months."
Capricorn Energy's Position
Capricorn Energy, a creditor of Waldorf, said it expects to receive cash proceeds of approximately $4 million to $5 million.
(Reporting by Sam Tobin; Editing by Susan Fenton)
