Harland and Wolff (H&W) will wind down a number of business functions to focus on its four main yards, including its Arnish base in Lewis, as it grapples with hefty financial troubles.
The firm confirmed it has secured a £19.5 million emergency loan from its US-based
lender, Riverstone, after the UK Government rejected its bid for a £200 million government
guarantee lifeline.
Its total debt to Riverstone now stands at £109 million.
A new strategy to ensure its future is being considered by the firm’s new board of directors following the departure of its chief executive and the addition of restructuring experts.
John Wood who was announced as being on a leave of absence for the past 11 days official left yesterday (Wednesday) as chief executive officer and is no longer a member of the board.
H&W has formally engaged Rothschild as financial advisers to assess strategic options and scrutinise all aspects of the group’s activity as it seeks to refocus on core business lines.
That includes axing its planned ferry service between Penzance and the Isles of Scilly with immediate effect. The high speed Atlantic Wolff catamaran will be returned to its manufacturer, Damen, in the Netherlands.
H&W is feared to be at risk of losing out on a £120 million project to redevelop a major port in the Falklands.
The Falkland Islands Government said it is meeting today in order to make a decision on the next steps “following recent events regarding Harland and Wolff, including an announcement by the UK Government not to proceed with Harland and Wolff application for Export Development Guarantee Funding or emergency liquidity funding.”
H&W stresses it is focussed on growing the business in its four key yards, Belfast,
Appledore, Methil and Arnish, and plans to close non-core activity.
Harland & Wolff’s interim executive chairman, Russell Downs, said: “It is regrettable that we have taken the tough decision to terminate the fast ferry, but we need to focus our energies and resources in continuing to grow the core business across our four delivery centres.
“This decision aligns with and brings us back to our fundamental five markets and six services strategy.”
Chairman Malcolm Groat commented: “We are grateful to our lenders in continuing their
funding commitment to support Harland & Wolff Group's ongoing stabilisation and long-term
strategy objectives.
“We also look forward to working with the very experienced team from Rothschild & Co to help us achieve that objective.”
Matt Roberts, national officer, of GMB union, said: “GMB is pleased Harland and Wolff’s financing has been confirmed and received.
“Now the company can focus on its core business and what we know GMB members can deliver.
“Harland and Wolff’s four core sites across the UK remain crucial to our domestic sovereign capabilities in shipbuilding and renewables fabrication.”
Arnish operator, Harland and Wolff, to focus on core business activities amid restructuring
1 August 2024
