TechnipFMC Shelves Spin-off Due to Market Turmoil
Franco-American oil services firm TechnipFMC Plc is putting on hold plans to split itself into two due to turbulence in financial markets linked to the coronavirus outbreak, it said on Sunday.
The group, created three years ago via the merger of Technip and FMC, had been planning to separate its engineering and construction activities from its upstream oil services business in the first half of this year.
"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," TechnipFMC said in a statement.
"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."
However, it said the rationale for the spin-off remained unchanged and that it would continue preparations in order to be ready to go ahead with the move once markets recover.
Crude oil markets last week posted their biggest weekly loss since the 2008 global financial crisis, rocked by the coronavirus outbreak and efforts by top exporter Saudi Arabia to raise production and cut prices.
TechnipFMC shares slid to an all-time low on Friday as the plunge in crude oil hit stocks of industry players, though they had rebounded by the close in line with a late surge in oil prices.
(Reporting by Gus Trompiz and Bate Felix; Editing by Jan Harvey)