Harland and Wolff have been rocked with the news that the Falkland Islands government has decided not to award a £120m project to the company.

In March, the shipbuilding company confirmed that they had been chosen as the preferred bidder to provide new port facilities at the island’s main port.

The project involves the build, transportation, and installation of four floating pontoons, each measuring around 90metres each in length for the British Overseas Territory.

However, the shipbuilder has confirmed it will no longer be involved due to both parties being “unable to reach a mutually acceptable commercial position.”

placeholder image — Harland and Wolff will not be awarded a £120m project from the Falkland Islands government despite being previously declared as the preferred bidder

A statement from H&W read: “Following a detailed review process, the Falkland Islands Government (FIG) have decided to cease further contractual negotiations with Harland & Wolff regarding the port replacement project.

"Despite productive discussions, FIG and Harland & Wolff were unable to reach a mutually acceptable commercial position.

"FIG acknowledges the effort and commitment demonstrated by Harland & Wolff throughout this process."

The update comes after the shipyard’s owners confirmed last week that the company had entered into arrangements with its existing lenders to increase its existing facility by $25m in order to improve and stabilise its liquidity position.

Furthermore, Harland and Wolff scrapped Scilly Ferries, a new ferry service which was supposed to run between Penzance and the Isles of Scilly but never made a single a journey.

The business, which was last month hit by news the UK Government was not proceeding with a £200m loan after ministers decided it would be too risky for taxpayers, also confirmed it has brought in Rothschild & Co to advise on strategic options.