Harland and Wolff Creditors Face Losses in Spanish Acquisition Deal

The historic UK shipbuilder Harland & Wolff’s sale to Spanish defence group Navantia will result in significant losses for creditors and suppliers when the deal concludes in January, according to the company’s interim executive chair.

Russell Downs, a bankruptcy and restructuring specialist who assumed leadership in July, emphasised that despite these losses, the agreement represents the optimal solution to preserve the iconic Titanic manufacturer’s four yards and safeguard 1,000 jobs. The deal emerged after months of intense negotiations following the company’s collapse into administration in September.

The 163-year-old shipbuilder’s financial struggles intensified when the UK’s Labour government rejected a £200 million emergency loan guarantee request in July, deeming it an inappropriate use of public funds. The situation prompted Wall Street lender Riverstone Credit Partners to extend a $25 million emergency loan, supplementing an existing $115 million facility.

The sale agreement includes a UK government commitment to increase a £1.6 billion contract for Royal Navy support vessels, previously secured by Navantia and H&W in 2022. While specific financial details remain undisclosed, Business Secretary Jonathan Reynolds described the changes to the contract value as “relatively minor.”

H&W demonstrated some financial improvement in 2023, with revenues more than tripling and operating losses halving to £24.7 million. The administration process, managed by advisory firm Teneo, will result in the companies operating the yards “ultimately ceasing to exist,” according to Downs.

The workforce of approximately 1,000 employees is expected to remain intact through the transition, marking a crucial milestone in preserving British shipbuilding heritage while adapting to modern market realities.

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