Waldorf Productions UK restructuring plan is approved despite opposition from tax authorities

The London High Court approved Waldorf Production’s restructuring plan on Tuesday, despite the opposition of Britain’s tax authority regarding the company’s 'windfall tax liabilities'.

Harbour Energy acquired Waldorf Group subsidiaries for $170 million after a previous restructuring plan was rejected by the High Court.

Harbour's purchase agreement required certain liabilities to be restructured. This included more than $94.4m owed to Britain’s tax authority HMRC under a windfall profit tax between 2022-2024.

HMRC claimed that Harbour wanted to use Waldorf Group tax losses, which they said were worth up to $900,000,000 in March to shield their own profits. Meanwhile, 14% of Waldorf Group windfall tax liabilities was paid.

Judge Michael Green, however, approved the restructuring plan. He said in a written ruling that HMRC would be "better-off under the plan" as opposed to the most likely alternative.

He said Waldorf was likely to be wound up, and HMRC will receive only 0.1% of windfall tax liabilities. The companies with the highest tax losses would then be sold, and the purchaser would use those losses.

He said Harbour assumed 'Waldorf decommissioning' liabilities, and that it would not be able utilise all of Waldorf's 'tax 'losses.

The judge stated that "the oil and gas industry can be highly volatile as we've seen in the past few weeks. And?financial outcomes can fluctuate greatly."

A spokesperson for HMRC said: "We are considering our next steps carefully after we note the decision made by the court."

Harbour?Energy's spokesperson stated: "We are pleased with the ruling and remain confident that the transaction will be completed in the next few months."

Capricorn Energy is a Waldorf creditor and expects to get cash proceeds between $4 and $5 million. (Reporting and editing by Susan Fenton; Sam Tobin)

(source: Reuters)