London-based Amec Foster Wheeler plc has begun headhunting for a new CEO following the immediate resignation on Jan. 18 of Samir Brikho, who had served nine years in the role and engineered the 2014 deal that linked engineer-constructors Amec and Foster Wheeler into what was then an $8.6-billion global giant.
Like other energy sector firms, however, Amec Foster Wheeler has suffered from tumbling global oil prices. Its share value fell by nearly 50% after Brikho announced a cut in dividend payment by half last November, its lowest in five years, and a lowered profit forecast. He blamed reduced orders and increased pressure on bid prices with “no sign of these trends changing."
In his nine years as CEO, Brikho “has made a significant contribution…including the reshaping and refocusing of the business at the start of his tenure to build up the global company Amec Foster Wheeler is today,” said Chairman John Connolly in a statement.
Chief Financial Officer Ian McHoul was named interim CEO until a replacement is found. He became CFO in late 2008 and has had a pivotal role in current efforts to refinance the firm’s debt, reduce costs and sell low growth businesses, says a company spokesman. The firm reports 2014 pro-forma sales of $7.9 billion.
Amec Foster Wheeler is a major participant in growing clean energy sectors, such as its engineering and technology research work on the ITER fusion reactor being built in the South of France. The firm won last year the largest nuclear robotics contract awarded by the project's owner, F4E, to a UK company.
Noting the company's statement that it was ramping up internal restructuring and cost cutting, "it will be a big task for a new CEO to come in and continue to effectively integrate the Foster Wheeler organization while 'hunkering down' given the outright plunge in the energy markets," says Steven Gido, a management and mergers consultant and partner at Rusk O'Brien Gido + Partners.
"It's going to be interesting times for this sector in 2016," says Gido, noting that many global and regional mid-size U.S. firms that ramped up or diversified their capabilities into oil & gas work from 2008 to 2014 now "are retooling, which is likely to generate additional energy consolidations for scale and survivability."