Waldorf Production's UK restructuring plan approved despite tax authority opposition

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.

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.

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 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.

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.

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.

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.

"The oil and gas industry is highly volatile, as ⁠we have seen ⁠in recent weeks, and financial results can ‌fluctuate widely," the judge said.

An HMRC spokesperson said: "We note the decision of the court and are carefully ​considering our next ​steps."

A Harbour Energy spokesperson said: "We welcome the ruling and ‌remain confident the transaction will complete in the coming months."

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)

Harbour Energy

Capricorn Energy PLC