DeepFlex work at port on temporary halt
- March 27, 2015
- / Carlton Proctor
- / economy
The recent sharp drop in worldwide oil prices is being blamed for a halt in construction of a $50 million manufacturing plant at the Port of Pensacola.
Port Director Amy Miller said Friday that construction crews have ceased work on the huge facility, which is a partnership between port customers Offshore Inland and DeepFlex, a flexible submersible pipe manufacturer.
“Because DeepFlex is capitalizing its corporate growth through private equity investment, current market conditions require that DeepFlex restructure their financing,” Miller said. “As a result, progress on construction at the Port of Pensacola facility has slowed and some DeepFlex vendors are experiencing slowed payment cycles.”
This slowed payment cycle has led to speculation that the DeepFlex plant, the largest capital project in the port's history, may be in jeopardy. That is false, Miller says.
“DeepFlex is simply undergoing a restructuring of their debt and capital funding,” she said.
[caption id="attachment_10438" align="alignright" width="450"]
Construction as it was underway in November at the DeepFlex Manufacturing facility at the Port of Pensacola. Michael Spooneybarger/ Pensacola Today[/caption]
Miller said the manufacturing facility is about 80 percent complete and that, based on its contract with the port, DeepFlex has until June 1, 2016 to complete the project.
“This is the type of short-term, market-based disruption that is not at all uncommon in the international marketplace and, in particularly, in oil industry related business sectors,” said Mayor Ashton Hayward. “We remain committed to the success of this project, and look forward to celebrating the opening of this important economic engine and job creator later this year.”
DeepFlex President and CEO, Felipe Lamego, has said construction of the plant will resume in June or July once the private equity financing has been restructured.
Lamego said the Houston-based company also is pursuing a short-term or bridge financing plan that will allow them to expedite outstanding vendor payments.
John Myslak, project manager for the Deepflex project, said Friday the construction halt is “obviously disappointing” but not surprising.
“The project should be back on track by June,” he said. “Right now I feel pretty confident that this is just a hiccup. DeepFlex is going to complete this project, it's just a matter of getting the funding lined up.”
Offshore Inland Vice President Buddy McCormick said construction crews ceased working on the building about three weeks ago.
Much of the financing for the DeepFlex project has come from investors in Brazil, McCormick said.
"They (DeepFlex) have some investors from Brazil who have started to panic because of the drop in oil prices," McCormick said. "That’s led DeepFlex to begin soliciting other private investors.”
DeepFlex expects to have that capital committed in the next 30 to 60 days.
“The time is going to come when DeepFlex is going to have to stop dragging their feet and push forward,” McCormick said.
Despite the halt in construction, Miller said DeepFlex is continuing, under terms of its contract with the city-owned port, to pay rent for the plant site.
“Investors determine the value of their investment based on the value of the company,” Miller said. “The sharp devaluation of oil has caused investors to devalue DeepFlex.
“So, to me this is really a market adjustment, and once they get their financing restructured, I believe they will finish the project within 120 days.”
Construction as it was underway in November at the DeepFlex Manufacturing facility at the Port of Pensacola. Michael Spooneybarger/ Pensacola Today[/caption]
Miller said the manufacturing facility is about 80 percent complete and that, based on its contract with the port, DeepFlex has until June 1, 2016 to complete the project.
“This is the type of short-term, market-based disruption that is not at all uncommon in the international marketplace and, in particularly, in oil industry related business sectors,” said Mayor Ashton Hayward. “We remain committed to the success of this project, and look forward to celebrating the opening of this important economic engine and job creator later this year.”
DeepFlex President and CEO, Felipe Lamego, has said construction of the plant will resume in June or July once the private equity financing has been restructured.
Lamego said the Houston-based company also is pursuing a short-term or bridge financing plan that will allow them to expedite outstanding vendor payments.
John Myslak, project manager for the Deepflex project, said Friday the construction halt is “obviously disappointing” but not surprising.
“The project should be back on track by June,” he said. “Right now I feel pretty confident that this is just a hiccup. DeepFlex is going to complete this project, it's just a matter of getting the funding lined up.”
Offshore Inland Vice President Buddy McCormick said construction crews ceased working on the building about three weeks ago.
Much of the financing for the DeepFlex project has come from investors in Brazil, McCormick said.
"They (DeepFlex) have some investors from Brazil who have started to panic because of the drop in oil prices," McCormick said. "That’s led DeepFlex to begin soliciting other private investors.”
DeepFlex expects to have that capital committed in the next 30 to 60 days.
“The time is going to come when DeepFlex is going to have to stop dragging their feet and push forward,” McCormick said.
Despite the halt in construction, Miller said DeepFlex is continuing, under terms of its contract with the city-owned port, to pay rent for the plant site.
“Investors determine the value of their investment based on the value of the company,” Miller said. “The sharp devaluation of oil has caused investors to devalue DeepFlex.
“So, to me this is really a market adjustment, and once they get their financing restructured, I believe they will finish the project within 120 days.”
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