3 days Ago By Paul Malik
Fears have been raised over the future of a Methil yard as owners Harland and Wolff teeter towards administration after running out of money. Belfast-based Harland and Wolff declared themselves insolvent on Monday after days of mounting speculation regarding the company’s cash-flow difficulties. The Titanic shipbuilder employs around 200 workers in Fife and also operates the former BiFab yard on the Isle of Lewis.
It is understood external investors are interested in taking on the four yards owned by Harland and Wolff, which will remain fully operational for the time being. But unions have warned the yards must not be “cherry-picked” by private investors and not left to “the mercy of the market”. The It secured an agreement last month to extend a loan facility with existing lenders by £19.
5m to £109.3m. All four yards owned by Harland and Wolff will continue to trade throughout any administration process, they said, as these are regarded as “other companies” within the group.
Harland and Wolff announced it was working with administration company Teneo on Monday. They said the company “is insolvent on a balance sheet basis” and contingency planning for the making of an administration order and appointment of administrators from Teneo was underway. Harland and Wolff said Monday’s news “would in no way” affect core operational companies within the group, referring to its four working yards, including Methil.
Russell Downs is the restructuring expert brought in to help the stricken company. He said: “The group faces a very challenging time given the overhang of significant historic losses and its failure to secure long term financing. “Good progress has been made to test the market for investor appetite.
“The board has reluctantly concluded that the company’s own future as an AIM-listed company will likely come to an end in the near future, but that the core operations undertaken by the four yards and Islandmagee will continue to trade as usual. “It is important to recognise that this is extremely difficult news for the company’s staff directly affected and will impact many others within group. “We will work to support our staff through this transition.
“Unfortunately, “This will clearly be very unwelcome news for shareholders who have shown significant commitment to the business over the last five years. “The board, the senior management 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.” Labour MP for Glenrothes and Mid Fife, Richard Baker, said it was vital the unions, Scottish and UK governments were involved from the beginning to secure the future of the yards.
Mr Baker said he had written to the minister for business, trade and net zero Sarah Jones regarding the immediate future of Methil. Speaking with The Courier, he said: “There is serious interest from other firms looking to take on the yards, including Methil. “These yards are of strategic importance to the UK.
“Securing the key role of the Methil yard is vital for Fife and Scotland if we are going to fulfil are ambitions to expand our renewables sector and become a leader in green energy. “Unions are right to highlight the strategic importance of these yards and this is why this process must be a priority for both UK and Scottish Ministers. “When we have more details about the preferred options for the future of the yards, it is vital all stakeholders are involved and the process moving forward recognises their importance not only to the defence sector, but the wider renewable and marine sectors too.
” Matt Roberts, GMB union National Officer, said: “Workers, their families and whole communities now face their lives being thrown into chaos due to chronic failures in industrial strategy and corporate mismanagement. “All four Harland and Wolff yards are needed for our future sovereign capabilities in sectors like renewables and shipbuilding. “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.
“Leaving these vital yards — and the crucial FSS contract with all its promises for UK shipbuilding — to the mercy of the market is not good enough. “The Government must provide support and oversight to get the market to the solution we need.”.
