UK shipbuilder Harland & Wolff said on Monday it had appointed Teneo to wind up the “insolvent” holding company five years after it was rescued from administration.
But the Aim-listed company, best known for building the Titanic, said that bids for the group’s four yards across the UK were being finalised and anticipated sales agreed within weeks.
“Contingency planning for the making of an administration order and appointment of administrators from Teneo is under way for the company. This process will probably commence this week,” it said. It saw “no return likely for shareholders” and an unspecified number of jobs would be lost.
The 163-year-old shipbuilder has been struggling to stay afloat since the UK’s new Labour government in July turned down a request for a £200 million (€238 million) emergency loan guarantee as an inappropriate use of public funds.
However, H&W said it saw a “credible pathway” to keeping alive its flagship Belfast yard and its three other yards in Britain, its Islandmagee gas storage project in Northern Ireland, and to delivering a Ministry of Defence contract in which it is a partner in a consortium led by Spain’s Navantia.
The company said bids for the yards were due this week and it hoped a deal would be concluded in the coming weeks.
While only a small number of bidders was expected to emerge due to security reasons, defence industry sources said a mix of British and international strategic bidders, including Spain’s Navantia, were in the running. They said it was unlikely that the yards would be sold together.
John Wood, the former chief executive who rescued the company out of administration in 2019 before exiting at the end of July, is in talks with financial backers about putting together a bid, according to people familiar with the situation.
Unite, the union representing most workers at H&W’s yards in Belfast and Appledore in south-west England, said its preferred option was “to secure a single buyer for all of the company’s yards”. It added that the purchaser should be a company and has a history of shipbuilding, rather than “a private equity outfit looking for a short-term profit”.
If the right buyer could not be found “the government should be prepared to intervene,” Irish regional secretary Susan Fitzgerald said.
The company employs around 1,200 people across its sites. As many as 60 are expected to lose their jobs at the holding company. Unaudited results published in July reported an operating loss of £24.7 million 2023 down from a £58.5 million loss in 2022.
Impending administration “will clearly be very unwelcome news for shareholders, who have shown significant commitment to the business over the past five years,” interim executive chair Russell Downs said.
Monday’s statement confirmed a Financial Times report that the company was now investigating the “misapplication” of more than £25 million of funds.
After the loan guarantee setback, H&W’s US lender, Riverstone Credit Partners, stepped in with $25 million (€22.5 million) but no further funding has materialised and “trading has been challenging given a significant value of overdue creditors”, the company said.
Matt Roberts, national officer at the GMB union, said workers’ lives were being “thrown into chaos due to chronic failures in industrial strategy and corporate mismanagement”.
“Leaving these vital yards — and the crucial [Ministry of Defence] contract with all its promises for UK shipbuilding — to the mercy of the market is not good enough. The government must provide support and oversight to get the market to the solution we need,” he added.
A spokesperson said the UK government was clear that “at present, the market is best placed to address these challenges” but it was working with all parties to protect the operations and jobs. Wood and Navantia did not immediately reply to requests for comment. – Copyright The Financial Times Limited 2024
(c) Copyright Thomson Reuters 2024
