Crisis averted at Meyer Werft

Another factor has been weak predelivery instalment schedules on cruise vessels with long construction periods. How much is paid, and when, is a key factor in competing to win hugely valuable cruise vessel contracts.

Now, the federal and state governments will take over 80% of Meyer Werft’s shares and invest EUR 400 million. They will also each provide guarantees of about EUR 1 billion to finance existing firm orders compensating in part for the end-weighted predelivery instalment arrangements. The state’s intervention has also reassured Meyer Werft’s bankers who will now participate in supporting the company’s bail-out.

The shipyard directly employs a workforce of 3,000 people. But many thousands of other jobs are linked to the shipyard through its complex network of suppliers and service providers. It is estimated that as many as 20,000 German jobs ultimately depend directly and indirectly on the shipbuilder.

The state’s involvement is not viewed as a permanent arrangement, however, and all parties will be working towards the shipbuilder’s future transfer back into private hands. The company’s owning family, Meyer, has therefore been granted a buy-back right.

Bernd Eikens, the shipbuilder’s CEO, commented: “Our goal is to lead Meyer Werft and its employees into a successful and secure future. We firmly believe that our company, with its innovative technology and dedicated team, has a future. We are confident that together we will emerge stronger from this crisis and maintain our position as one of the leading companies in international shipbuilding. We would like to thank our employees, partners and customers for the trust they have placed in us and for their support in these challenging times.”