Petrofac Ltd said Wednesday it had received confirmation from HM Revenue and Customs (HMRC) that the United Kingdom tax agency will not appeal a Scottish court ruling that upheld an agreement between Petrofac and certain creditors.

The agreement, known as a company voluntary arrangement (CVA), is a debt restructuring plan approved by certain Petrofac creditors January 30. The CVA would allow Petrofac, the British energy engineering company under administration since last year, to complete the sale of its Asset Solutions division to CB&I. Proceeds would be used to settle creditor claims through an allocation plan that ranks the creditors into different categories, according to the ruling published Wednesday.

HMRC voted against the CVA, then challenged it before court, arguing the arrangement was unfair to HMRC’s claims. The tax agency’s claims are tied to historical National Insurance Contributions (NICs) for workers.

“The successful CVA is a required condition for the sale of Petrofac’s Asset Solutions business to CB&I. Together, Petrofac and CB&I are working to conclude the sale in the shortest possible timeframe – securing the future of 3,000 highly skilled people”, Petrofac, under administration since last year, said Wednesday in a brief statement online.

HMRC claims around GBP 151.06 million ($201.89 million) in NICs from Petrofac, for workers employed by two Jersey companies in the group from October 1999 to April 2014. The amount includes about GBP 58.81 million in interest, according to the court judgment published on the website of the Scottish Courts and Tribunals Service.

“HMRC, unlike the other creditors, was not a voluntary creditor in respect of that debt”, the Court of Session acknowledged.

“Rather, PFML had accumulated a debt of very considerable size through its own avoidance activity, which sum remained unpaid to HMRC with the buyer of PFML being freed from its financial consequences as a result of the votes of uncompromised creditors”, Lord Sandison said in the ruling, referring to Petrofac Facilities Management Ltd. PFML is the main contractor and employer in Petrofac’s Asset Solutions business, according to the court.

However, the court resolved that “the CVA was presented against a background where there was, in effect, a moral certainty that the absence of a composition of PFML’s enormous debts would result in its imminent entry into a formal insolvency process, and that there was no realistic prospect whatsoever of it being able to pay those debts or any material portion of them by way of the profits of further trading”.

“It further there appears that the prospects of PFML being sold while still carrying its debts, or of a better overall price being obtained for the assets to be acquired by CB&I, are negligible”, Sandison wrote.

“Those features of the case thoroughly permeate the issues to be considered, especially in that they provide the background against which the value of HMRC’s existing rights falls to be assessed, and strongly suggest that any residual negotiating value which might otherwise attach to those rights is properly to be regarded as inconsequential.

“So viewed, there is indeed a bargaining surplus offered to HMRC by the terms of the CVA. I accept the uncontroverted evidence for the respondent that the CVA will produce for HMRC a return in excess of the reasonably-realizable value in insolvency of the rights being compromised.

“That return will be at least 0.45 percent of the relevant debt, as opposed to the 0.12 percent probably to be obtained in an insolvency process, and is likely to be more.

“While I consider that it is the likely outcomes in both eventualities which fall to be compared, even proceeding on the basis of a comparison between the likely insolvency outcome and the minimum return from the CVA, those figures are not sufficiently close as to enable the difference properly to be described as minimal, either in percentage or absolute pecuniary terms.

“No prejudice to HMRC arises from this approach to the comparison between its position under the imposed bargain and its position as that would otherwise be”.

The court also said that the differential treatment of creditors in the fulfilment of claims in the CVA “was entirely justifiable”.

“HMRC’s argument focused on the treatment of the Category I creditors… The great majority of the Category I creditors (amounting to approximately GBP 68 million or 76 percent in value of Category I) were critical or irreplaceable suppliers. Compromising those claims would probably result in the loss of such critical supplies, giving rise to contract breaches and the failure of the business”, Sandison ruled.

Petrofac’s sale of its Asset Solutions business to CB&I would save jobs for around 3,000 Petrofac workers, according to the agreement the companies announced December 24, 2025.

On March 17, 2026 Petrofac said it had signed an agreement to divest its business in the United Arab Emirates to an investor consortium led by Mason Capital Management LLC and Pearlstone Alternative (UK) LLP. 

“Petrofac Emirates encompasses Petrofac’s core engineering and construction (E&C) capability, including the E&C execution teams in the UAE, Chennai and Mumbai”, Petrofac said.

The deal “preserves Petrofac’s execution and engineering capability and delivers continuity for the contracts currently under execution”, said Petrofac chief executive Tareq Kawash.

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