Ministers are trying to convince Navantia that it should bid on four Harland & Wolff shipyards in Northern Ireland, England and Scotland. This is to prevent job losses for the struggling British shipbuilder. According to those briefed about the issue, ministers want to convince Navantia that it should take over the four Harland & Wolff shipyards located in Northern Ireland. England and Scotland are also included.
The government has said that it is committed to protecting the 1,200 employees of the 163-year old company, which includes Appledore, Devon and two Scottish facilities in Methil and Arnish.
H&W’s shares, which have been suspended by Aim since July, were announced to be entering administration this month. The company also said it was investigating “misapplications” of over £25mn in corporate funds. H&W yards are separate entities and can continue to operate even if the listed company goes into administration.
Navantia, a state-owned company, is interested in acquiring Belfast’s yard. This is partly because the two companies are working together on a Royal Navy project. In 2022, Navantia was part of a consortium that included H&W and won a £1.6bn British Government contract to build three Royal Navy support vessels. This contract will result in the first ship to be finished in H&W Belfast in over two decades. It is a major boost for Northern Ireland’s manufacturing sector. The Ministers now try to convince Navantia that they should also buy H&W’s three other yards.
One person with knowledge of the situation said that the government “hoped that Navantia would pick up the whole package even though they had less interest in the three other sites and you would expect it to come at a discount price”. The government rejected H&W’s request for a £200mn guarantee in July to lower the interest on H&W’s borrowings. H&W has shifted its focus to energy, renewables, and cruise ship refurbishment. It tripled revenues by 2023, and cut its operating losses in half to £24.7mn.
The company was forced to face difficulties when interest payments on borrowings increased by 50%, reaching PS18.4mn. The company is burdened with high-cost debt provided by an American fund. Russell Downs is the interim executive chairman at H&W and wants to sell all four yards together. He hopes to close a deal in a few weeks.
He stated that the company will “provide an update as appropriate”. The union leaders are worried about the preservation of jobs. About 600 H&W employees are based in Belfast. The city has been preparing for the Royal Navy’s supply ship contract.
People close to the situation have confirmed that John Wood, former CEO of H&W who saved the company from administration in 2019, expressed interest in bidding on the company. He declined to comment. The company, Navantia, and Rothschild the adviser to the company, all declined to comment.
Teneo, the company that is slated to take over H&W, declined to make any comment.
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