H&W faces uncertain future

As shipyards in Northern Europe cash in on buoyant newbuilding and repair markets, troubled Belfast shipyard, Harland & Wolff (H&W), is struggling to secure its future. In mid-July, a GBP 200 million loan guarantee facility from the new UK Government was turned down and the iconic shipbuilder was forced into emergency talks with lenders.

According to reports, the shipbuilder had been assured of further support by the Government more than 12 months ago. Refusal to provide the loan guarantee came as a bitter blow following more than a year of interim support which was thought to be a pathway to more secure arrangements. H&W executives have now appointed merchant bank Rothschild & Co as advisers.

The UK Government’s move not to support the Belfast builder has forced the yard’s management to pursue discussions with other potential sources of finance. These include Riverstone Credit Opportunities Income, a US merchant bank that had already funded the shipyard with a USD 115 million loan.

As July drew to a close, H&W managers were engaged in far-reaching discussions with the UK’s new Labour Government, which had taken the helm three weeks earlier in a landslide election victory after 14 years of Conservative rule. Some of the talks were understood to focus on possible deals for new UK Navy assets.

Two years ago, H&W won part of a three-ship Royal Navy contract for aircraft carriers worth GBP 1.6 billion. The company is understood to have been in line for more than 40% of this deal which would have brought work to both the Belfast yard in Ireland and Appledore on the UK mainland. H&W also has two other shipyards in Scotland.

At the time of writing, talks continue.