{"id":11423,"date":"2024-09-16T08:09:53","date_gmt":"2024-09-16T08:09:53","guid":{"rendered":"https:\/\/news.godj.com\/news\/whats-gone-wrong-at-the-titanic-shipyard\/"},"modified":"2024-09-16T08:09:53","modified_gmt":"2024-09-16T08:09:53","slug":"whats-gone-wrong-at-the-titanic-shipyard","status":"publish","type":"post","link":"https:\/\/news.godj.com\/news\/whats-gone-wrong-at-the-titanic-shipyard\/","title":{"rendered":"What\u2019s gone wrong at the Titanic shipyard?"},"content":{"rendered":"


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Harland and Wolff was bought out of administration in 2019<\/figcaption><\/p>\n<\/figure>\n
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There is a growing expectation that Harland and Wolff’s holding company will soon be placed into administration.<\/p>\n

It will be the firm’s second insolvency in five years.<\/p>\n

What has gone wrong?<\/p>\n

Shipbuilding is a capital-intensive business which means you need to spend a lot of money before you can start to make money.<\/p>\n

The major problem at this incarnation of Harland and Wolff is that it was never really financially strong enough to do that.<\/p>\n

It ended up being dependent on a hard-nosed US lender while waiting for government support that never materialised.<\/p>\n

All the while it was burning through cash as it tried to get its operations up to the size needed to tackle a major contract.<\/p>\n<\/div>\n

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The 2021 accounts, which covered a 17-month period, showed a loss of more than \u00a325m<\/figcaption><\/p>\n<\/figure>\n
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Harland and Wolff was bought out of administration<\/a> in 2019.<\/p>\n

Its previous Norwegian owners had withdrawn support and the business fell into insolvency, having not built a ship in a generation.<\/p>\n

The new owner was not a recognised marine engineering company. <\/p>\n

It was InfraStrata, a relatively small energy firm listed on London\u2019s junior stock market whose major focus was developing a gas storage facility under Larne Lough.<\/p>\n

It raised \u00a36m from shareholders to help complete the deal and later tapped shareholders for more money but the sums raised were not equal to the firm\u2019s ambition.<\/p>\n

Central to that ambition was the Fleet Solid Support (FSS) project, a contract to build three support ships for the Royal Navy with a total value to Harland and Wolff of about \u00a3700m.<\/p>\n<\/div>\n

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Accounts for 2022 showed a turnover of \u00a328m and a loss of about \u00a370m<\/figcaption><\/p>\n<\/figure>\n
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The shipyard\u2019s role is subcontractor to the senior partner on the project, Navantia, Spain\u2019s state-owned shipbuilder.<\/p>\n

The award of that contract in 2022<\/a> was welcomed in Belfast as it heralded the return of shipbuilding to the city in what looked like a remarkable turnaround.<\/p>\n

The then Northern Ireland Secretary, Chris Heaton-Harris, said it was a “fantastic testimony to Belfast’s shipbuilding heritage and reputation for innovation and expertise”.<\/p>\n

Elsewhere there was scepticism about awarding such a large project of national importance to a company with so little recent experience in shipbuilding.<\/p>\n

The then Labour MP Kevan Jones asked a series of parliamentary questions probing Harland and Wolff\u2019s role.<\/p>\n<\/div>\n

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Unaudited accounts for 2023 saw a loss of \u00a343m <\/figcaption><\/p>\n<\/figure>\n
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Meanwhile the company\u2019s financial losses were mounting.<\/p>\n

The 2021 accounts, which covered a 17-month period, showed a loss of more than \u00a325m.<\/p>\n

The audited annual accounts for 2022 showed turnover of \u00a328m and a loss of about \u00a370m with the auditor\u2019s opinion of “material uncertainty” about the firm\u2019s ability to continue as a going concern without new contract wins and additional funding.<\/p>\n

Unaudited accounts for 2023 saw a loss of \u00a343m.<\/p>\n

The company was increasingly reliant on high-interest borrowings from a specialist US lender, Riverstone, while telling shareholders that it was expecting to get a government guarantee that would allow refinancing with more conventional lenders.<\/p>\n<\/div>\n

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The new Labour government confirmed there would be no support<\/figcaption><\/p>\n<\/figure>\n
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As doubts grew about the guarantee and the company being unable to produce audited accounts, trading in its shares was suspended in July.<\/p>\n

The new government confirmed there would be no support as there was “a very substantial risk that taxpayer money would be lost”.<\/p>\n

Russell Downs, a restructuring expert, was parachuted in to act as executive chairman and began a strategic review<\/a> of the business along with advisors from Rothschild bank.<\/p>\n

By that stage it was clear that Harland and Wolff\u2019s future would need a new owner with much deeper pockets than InfraStrata.<\/p>\n

The question now is who that will be.<\/p>\n<\/div>\n<\/div>\n


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Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Getty Images Harland and Wolff was bought out of administration in 2019 There is a growing expectation that Harland and Wolff’s holding company will soon be placed into administration. It will be the firm’s second insolvency in five years. What has gone wrong? Shipbuilding is a capital-intensive business which means you need to spend a […]<\/p>\n","protected":false},"author":1,"featured_media":11424,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[3270,4251,645,696],"class_list":["post-11423","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-shipyard","tag-titanic","tag-whats","tag-wrong"],"_links":{"self":[{"href":"https:\/\/news.godj.com\/news\/wp-json\/wp\/v2\/posts\/11423","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/news.godj.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.godj.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.godj.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/news.godj.com\/news\/wp-json\/wp\/v2\/comments?post=11423"}],"version-history":[{"count":1,"href":"https:\/\/news.godj.com\/news\/wp-json\/wp\/v2\/posts\/11423\/revisions"}],"predecessor-version":[{"id":11425,"href":"https:\/\/news.godj.com\/news\/wp-json\/wp\/v2\/posts\/11423\/revisions\/11425"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.godj.com\/news\/wp-json\/wp\/v2\/media\/11424"}],"wp:attachment":[{"href":"https:\/\/news.godj.com\/news\/wp-json\/wp\/v2\/media?parent=11423"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.godj.com\/news\/wp-json\/wp\/v2\/categories?post=11423"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.godj.com\/news\/wp-json\/wp\/v2\/tags?post=11423"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}