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Struggling oil services and engineering company Wood Group, which is a takeover target for Dubai-based Sidara, has tapped advisers to navigate parallel refinancing talks with its lenders as it battles with a heavy debt load.
The Scottish company is working with bankers at Rothschild & Co on the debt talks, according to three people familiar with the matter, underscoring challenges faced by Wood, whose share price collapsed last month after a negative trading update.
Wood’s valuation dropped to less than £200mn two weeks ago — down from a peak above £5bn in the previous decade — as it continued to burn cash ahead of a planned $1.4bn refinancing by October 2026.
The shares have climbed in recent days after the Financial Times reported that Sidara had returned with a fresh takeover approach after walking away from a deal to buy the company for £1.6bn last summer. The talks were later confirmed by the companies.
Wood had earlier failed to reach an agreement with private equity group Apollo, which tried to buy the company for about £2.2bn in 2023.
The talks to refinance the debt are running on a separate track to the takeover discussions, people familiar with the situation said.
Analysts have warned that the steep fall in Wood’s share price had narrowed its refinancing options and made equity issuance more challenging.
Wood and Rothschild both declined to comment.
Aberdeen-based Wood had been a rare homegrown multinational success story from the UK’s development of North Sea energy assets, leading it to partner with the likes of ExxonMobil and Chevron. Its market value peaked at £5.3bn in 2018, shortly after its takeover of engineering rival Amec Foster Wheeler.
But the company’s aggressive expansion towards the end of the previous decade left it laden with debt and shareholders nursing steep losses, prompting one industry veteran to say the business was in a “death spiral”.
Chief executive Ken Gilmartin said last month that he had laid out “a very clear route to positive free cash flow in 2026” but investors have remained sceptical about its strategy. The company also disclosed last month that a Deloitte review had uncovered “material” governance weaknesses in its projects division.
Wood employs more than 35,000 globally and has 4,500 staff in Aberdeen, making it one of the largest employers in the UK’s energy capital.
The company said it had an order book of $6.2bn at the end of 2024 and has announced plans to cut costs.
