Chieftain acquisition suddenly looks ill timed
Following the cancellation of a material £9m contract, the timing of Redhall Group’s acquisition of Chieftain, the former AIM quoted engineering group, now looks questionable.
The contract awarded to Chieftain by Sea Dragon Offshore Ltd covered the fit out of a semi-submersible oil rig and was planned for the second half of the financial year ending 30th September 2009. The loss costs Redhall £1m of operating profit. Given the materiality of the contract and it significance in the current financial year it does beg the question how much due diligence was undertaken by Redhall prior to concluding the acquisition. The company is seeking legal advice with regard to possible compensation but this will unfortunately result in yet more fees and is surely unlikely to fully…