Harland & Wolff to appoint administrators as debt woes deepen

Harland & Wolff said on Monday it will either wind down or dispose of its noncore businesses and lay off some employees as the shipbuilder struggles to stay in business amid a debt crisis.
In a stock exchange statement, Aim-traded H&W said it saw “no return likely for shareholders” if it entered administration, as well as an unspecified number of redundancies.
However, it said it saw a “credible pathway” to keeping its four yards alive and to delivering a UK ministry of defence contract in which it is a partner with Spain’s Navantia. Bids for the yards are expected “shortly” and H&W said it hoped a deal would be concluded in the coming weeks.
Russell Downs, a restructuring expert who took over last month as interim executive chairman, said the four yards operate as separate corporate entities hat can be kept afloat even if the listed business enters administration.
“I don’t think the Plc will play a great part in the future … it’s run its course,” he said last week.
The company, known for building the Titanic, did not specify the number of jobs it was planning to cut, but said it will reduce headcount in the noncore and certain central support areas. The firm’s non-care operations include the marine services business, the Scilly Ferries business, and the US and Australian units.
The 163-year-old shipbuilder employs about 1,200 people across four locations: its flagship yard in Belfast; Appledore in the southwest of England; and two sites in Scotland.
The Belfast-based shipyard, which has struggled to keep up with competition and is overdue on its credit line, was turned down for a £200 million (€237 million) credit facility by the UK government in July.
Reacting to the news, Matt Roberts, national officer at the GMB trade union said workers faced turmoil “due to chronic failures in industrial strategy and corporate mismanagement”.
“All the four Harland & Wolff yards are needed for our future sovereign capabilities in sectors like renewables and shipbuilding,” he said. “The Government must now act to ensure no private company is allowed to cherry pick what parts are retained, in terms of which yards or contracts they wish to save.
The group sent its CEO on immediate leave in July. Its finance chief also stepped down last week.
Trading of the company’s shares has been suspended since July, pending finalisation of its 2023 accounts on a going concern basis.
The shipbuilder will keep its core operations running at its four shipyards and retain its interest in the Islandmagee Gas Storage project.
It emerged last week that Harland & Wolff is investigating the “misapplication” of more than £25 million of corporate funds. Mr Downs told the Financial Times he had launched an “independent and focused forensic investigation” into the funds.
The probe was examining a “misapplication of probably over £25 million” as well as spending “at a much lower level… which seemed to be for little or no financial or corporate benefit”.
Mr Downs stressed that the investigation was into the “misapplication of funds, not misappropriation” and that the probe “needs to determine the full extent, if any, of any wrongdoing”. But he added: “It’s a concern of customers who are obviously putting money in against obligations with an expectation that money will be used in a particular way, which it appears it hasn’t.” – Copyright The Financial Times Limited 2024 / Reuters
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