Spanish shipbuilding company, Navantia, is presently the sole interested party considering the purchase of Harland & Wolff, the Belfast shipyard responsible for building the famed Titanic. This could potentially save around 1,000 jobs from being lost. This potential transfer of ownership of the company’s four shipyards positioned in Belfast, Devon’s Appledore, the Isle of Lewis’ Arnish and Methil in Fife, might be finalised as soon as next month.
Unlike the expected scenario, the deal does not involve a ‘prepack’ administration for the operational organisations running the shipyards that could put employees at potential risk. Currently, the administration only includes the principal holding company of Harland & Wolff.
As part of their ongoing effort to ensure the execution of a £1.6 billion (€1.9 billion) contract with Harland & Wolff for the construction of three Fleet Solid Support (FSS) vessels delivering vital supplies to aircraft carriers, the Royal Fleet Auxiliary, a civilian part of the Royal Navy, has been receiving financial backing from Navantia.
With the original construction strategy, both companies would have produced individual sections of the vessels at their shipyards in Appledore and Cádiz respectively, which would have been then assembled in Belfast. However, the concern surrounding the main company of Harland & Wolff being in administration threw the project’s future into uncertainty.
A range of plans including an acquisition are being scrutinised by Navantia to ensure the contract’s safety, and no definitive decision has been made yet. The Sunday Telegraph first disclosed the specifics of a forthcoming deal.
The administrators of Harland & Wolff’s primary company are eager to finalise an agreement promptly to confirm and secure new contracts. The sales process being led by Rothschild has drawn interest from at least 20 other companies aiming at different aspects of the business. A proposed gas storage operation in Northern Ireland and a discontinued ferry service to the Isles of Scilly are controlled by the business.
Government officials have been expressing concern over the shipyards’ future for a while now, as the risk of substantial losses to taxpayers that could arise from loan guarantees of £200 million could not be ignored. In August, a denial of the loan guarantee offered earlier by the previous Conservative government was enforced by Business Secretary Jonathan Reynolds. However, in July, Mr. Reynolds had also assured he was hopeful that Royal Navy vessels would continue to be built in Belfast.
Russell Downs, the specialist in corporate restructuring who took the helm as temporary executive chair at Harland & Wolff during the summer season, commented: “The fundamental operations across the group’s four shipyards continue to operate, backed by every stakeholder. We shall give a progress report on our strategic plan when the time is appropriate.”