TechnipFMC said on Sunday it will put off its planned separation into TechnipFMC and Technip Energies as market conditions have changed materially due to the COVID-19 pandemic.
The company said it believes that the sharp decline in commodity prices, and the heightened volatility in global equity markets, have created a market environment that is not currently conducive for the split to move forward at this point.
However, TechnipFMC emphasized that its strategic rationale for the separation remains unchanged, and that it is “committed to the transaction and continues its preparations to ensure that the two companies are ready for separation when the markets sufficiently recover.”
The initial separation was expected to be completed in the first half of 2020.
As earlier reported, the transaction is expected to be structured as a spin-off of TechnipFMC’s Onshore/Offshore segment and based in Paris, France. The spin-off would be positioned to capture LNG opportunities, benefit from its position in the downstream market, as well as future growth opportunities in biofuels, green chemistry and other energy alternatives.
At the end of 2019, TechnipFMC backlog was $24.3 billion, including subsea backlog of $8.5 billion. The company recognized 2019 net loss of $2.41 billion on revenue of $13.4 billion.