Risk mitigation and integration for an offshore wind acquisition

How we helped

• Energy & Process Industries
• Renewables

Adding offshore wind generation to the portfolio was going to bolster a large renewables player. In the short term, however, it became a significant liability. The company had acquired an OEM for a fleet of offshore turbines, finding after the fact that there were long-term Energy Performance Contract (EPC) commitments, warranty obligations, and technical challenges relating to the assets.

One asset was still under construction and significantly delayed, complicating the eventual handover. The parent company needed to know exactly the nature of the financial risk and exposure, and to have a mitigation strategy in place. They called us.

The company had seen a series of ownership and management changes in recent years and had endured a public relations incident relating to a faulty offshore turbine.

We identified significant exposure and created a plan to establish appropriate financing and guarantee structures. The mitigation plan covered all potential actions—ring-fencing, an operational workout within the troubled company, full integration into the parent structure—and was folded into a governance structure. One of our experts was asked to assume the CEO function of the subsidiary alongside the CFO of the parent company.

The crisis response had to cover immediate crisis tactics, the set-up of a project structure to manage containment actions and long-term mitigation, stakeholder management—all at once. Leadership decided the best mitigation strategy was to integrate the wind company into the parent group and consolidate the operational footprint.

We helped relocate and consolidate onshore repair facilities in a central hub, and eliminate extraneous logistics and administration sites, created a headcount reduction plan, and negotiated with the workers’ council.

Across the company, risk exposure was mitigated by an efficient operational setup, renegotiating contracts to allow for the handover of the incomplete turbine, and establishing proper claims management structures.