Royal Navy: Harland and Wolff which is building new ships for the Navy is set to move into administration
A shipbuilder which was part of a consortium building new ships for the Royal Navy is set to move into administration.
Belfast shipbuilder Harland and Wolff said between 50-60 immediate redundancies are expected but said that staff employed at its four shipyards - one in Belfast, two in Scotland (Methil on the Firth of Forth and Arnish on the Isle of Lewis) and one in England (Appledore in Devon) - are not affected.
It is the second time the business, which famously built the Titanic - has been placed in administration in five years. The administration process will be confined to the holding company, Harland & Wolff Group Holdings PLC, and the operational companies which run the yards are expected to continue trading.
A company statement said: “A full review of all group holdings commenced in July and has concluded that H&W Group Holdings PLC is insolvent on a balance sheet basis as per its last audited accounts and most recent management accounts.” Insolvency practitioners Teneo will act as administrators and shares will be delisted.
The company is part of a consortium which landed a major Royal Navy contract for the Fleet Solid Support Ship Programme and build three ships to support the British Royal Fleet Auxiliary. The ships will be used to provide underway replenishment of dry stores, such as ammunition, spare parts and supplies, to ships of the Royal Navy.
It had applied for a £200 million loan guarantee from the Government as part of efforts to restructure its finances. However, the Government decided in August not to act as a guarantor on the lending – while also ruling out direct funding to maintain the company’s liquidity.
Harland and Wolff interim executive chairman Russell Downs said the group had faced a “very challenging time” due to historic losses and a failure to secure long-term financing.
He said: “It’s important to recognise that this is very difficult news for staff and will affect many within group. We will work to support our staff through this transition.
“We also know that it will be very unwelcome news for shareholders who have shown significant commitment to the business over the last five years.
“The board, the senior managers and rest of the team are committed to deliver the best outcome for the four yards and communities they serve to ensure their continued operation into the long term under new ownership.
“Unfortunately, extremely difficult decisions have had to be taken to preserve the future of our yards.
“Despite the recent challenges, the four yards have a strong capability, under new ownership and with the continuing support of their customers, to deliver UK-based ship building and leading UK-based renewables employing over 1,300 committed personnel.
“It’s critical that the business comes through its financial troubles to secure an enduring legacy worthy of its name and its past for the benefit of the UK as a whole and its communities in particular.”
A Government spokesperson said that while the news was ‘concerning’ it had no impact on the contracts to build the new Royal Navy ships.
In a statement the government said: “While we know this will be a concerning time for those affected, Harland and Wolff has been clear this process will in no way affect jobs at its shipyards or core operations such as delivering its contracts for the Ministry of Defence.
“We are clear that following a thorough review of the company’s financial situation, at present the market is best-placed to address these challenges, and providing Government funding would have meant a significant risk of losing taxpayer money.
“We are continuing to work extensively with all parties to find an outcome for Harland and Wolff that delivers shipbuilding and manufacturing in Belfast, Scotland and across the rest of the UK and protects jobs.”
This was also confirmed by Northern Ireland Secretary Hilary Benn who said the £700 million project to build the support ships at Harland and Wolff shipyard will continue.
Mr Benn said: “It’s the holding company which has gone into administration.
“Now, Harland and Wolff, the shipyard, is continuing to operate, continuing its work, as you know it’s got the contract for the three solid support ships, a huge Ministry of Defence contract.
“We will be talking to everybody about hopefully finding a new owner, but we are committed to maintaining shipbuilding across the UK including in Belfast.”