Report: Harland & Wolff’s four shipyards, including Belfast, to be acquired in a rescue deal
It is believed that Spanish state-backed Navantia is close to receiving approval from Downing Street to acquire the shipyards in a move which would safeguard more than 1,000 jobs
A deal for Harland & Wolff’s four shipyards to be acquired in a rescue deal is reportedly set to received approval from the UK Government.
It is believed that state-backed Spanish shipping industry group Navantia is close to receiving approval from Downing Street to acquire the shipyards in a move which would safeguard more than 1,000 British industrial manufacturing jobs.
Although not confirmed by either firm, it is believed Navantia has won approval from Downing Street to acquire H&W's four UK shipyards - Belfast, Appledore, Arnish and Methil - in a transaction which could be formally agreed as early as next week.
According the Sky News, Whitehall sources cautioned that a deal has yet to be finalised, and remained subject to change, but acknowledged that an outline agreement had now been reached. Under the deal, they said, Navantia is expected to pay tens of millions of pounds for H&W's assets.
The news outlet also said that it had secured the government's backing for a renegotiated contract held by the Belfast-based company to build three Fleet Solid Support (FSS) ships for the Royal Navy. The arrangement has yet to be finalised and is subject to change.
In 2023, the group reported a surge in interim revenues by 65% to £25.53m, for the six months ended 30 June 2023, which was up from £15.4m the prior period. One of the biggest contracts that the group won for the year was the £1.6bn contract agreed across the company, BMT, and Navantia UK, which was set to deliver three Fleet Solid Support (FSS) ships for the Royal Fleet Auxiliary.
Preparations for the contract along with other deals meant the business made an EBITDA loss of £15.92m in its unaudited interim results compared to £12.71m losses the previous year.
In the unaudited accounts for the year to 31 December 2023, H&W's revenues grew to £86.9m, a 213% increase over its FY22 revenues of £27.75m.
The company said that it was also able to reduce its operating loss in FY by 136% to £24.7m. H&W's interest burden, however, increased from £12.3m in FY22 to £18.4m in FY23.
In March 2024, the business announced it had been awarded preferred bidder status for a Falkland Islands project which the fabrication company said could generate up to £120m in revenue over a two-year period.
Then in August, the Falkland Islands Government (FIG) decided to cease further contractual negotiations regarding the port replacement project. H&W said that the two were unable to reach a mutually acceptable commercial agreement.
Prior to the Labour party coming into power in July 2024, the group had been in discussions with the conservative government regarding a £200m Export Development Guarantee (EDG) facility. H&W warned at the time, "should there be any material delays to securing the facility post the General Election, the company's ability to execute new and large contracts would be adversely affected".
While there were speculative reports in May that former Chancellor Jeremy Hunt was set to reject the application - which the group dismissed as "misleading and inaccurate" - in July, the new Labour government announced that it would not be proceeding with the facility.
The secretary of state of business and trade, Jonathan Reynolds said the UK government would not proceed with the loan due to the "substantial risk" that taxpayer money would be lost.
Unions called for action to ensure the future of the shipyards while CEO John Wood announced he would step down from his position with immediate effect.
Then in September H&W, which was founded in 1861, and is the name behind the most famous passenger ship in history the Titanic, announced it had entered administration.
The group cited the administration as a result of challenging trading due to the rejection for a UKEF facility and a "significant value of overdue creditors" across the group, and the company in particular.
Following the announcement, H&W said it had appointed accountants PwC and law firm Simmons and Simmons to investigate an alleged ‘misapplication’ of funds under the previous management.
This specifically referred to "the alleged misapplication of remittances in excess of £25m and certain other lower value matters, such as the disbursement of funds for little or no corporate benefit".
In October it was announced that Navantia, the shipbuilder owned by the Spanish state, was reportedly in exclusive talks to buy the business.
H&W have been contacted for comment regarding the latest development.