World-famous Belfast shipyard Harland & Wolff (H&W), where the ill-fated Titanic was laid down, has been issued a new loan worth $25m to save it from collapse.
However, the late reprieve has not saved the company’s Scilly Ferries project, which was intended to launch later this month.
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The company announced via the London Stock Exchange that its existing creditors had extended the shipyard’s lines by $25m, meaning its full facility is worth $140m.
H&W has been struggling to find adequate liquidity since a potential government-underwritten loan was pulled by the last UK administration.
Along with the new credit, H&W has appointed Rothschild & Co as financial advisor, to help “assess strategic options”.
Chairman Malcolm Groat said the Group’s main focus was stability.
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By GlobalData“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.”
One of the strategic decisions made is the culling of Scilly Ferries, a high-speed ferry service between Penzance in the southwest of England and the Scilly Isles. Despite tests of the Atlantic Wolff vessel on the route, it was yet to carry a fare-paying passenger.
H&W said the expansion into ferry provision was “overly ambitious given the current circumstances.”
The Group’s interim chair Russell Downs said the company’s freight service to the islands would continue.
“We understand that this will be difficult news for those affected immediately and for the community it was intended to support. It is important to note that this is an isolated and unique situation within the group which continues to deliver its business as usual, serving its ship repair fabrication and ship building customers,” he said.
The Atlantic Wolff vessel was designed and built by Damen and will now be returned to the Netherlands shipyard.
“The Company remains focussed on growing the business in its four key delivery centres (Belfast, Appledore, Methil and Arnish) and will be winding down business lines that are deemed to be non-core for the Company,” the H&W LSE statement explained.
It added that “discussions are ongoing to dispose of the fast ferry.”
Groat described the decision as “regrettable” but promised a “smooth transition”.
“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. Our ferry service team will be working closely with passengers and other counterparties to ensure a smooth transition out of this business.”
The new funding will give customers, including the UK Ministry of Defence (MoD), confidence the historic shipbuilding company can continue to deliver on its orderbook.
As reported in our sister publication Naval Technology the MoD awarded a $2bn contract to Team Resolute, comprised of UK ship designers BMT, UK shipyard Harland & Wolff (Belfast and Appledore), with Navantia UK, an arm of Spanish shipbuilder Navantia, acting as prime.
The contract kick-started the building of a new manufacturing and assembly block, intended for the UK Fleet Solid Support (FSS) class of logistics vessels for the Royal Fleet Auxiliary.
