Mangalia Shipyard in Romania, one of the largest shipbuilding facilities in Europe, has officially started insolvency proceedings. Following the decision in 2023 to withdraw from the joint agreement with the Romanian government on the Mangalia shipyard, the Dutch Damen Shipyards Group has filed an insolvency petition for the Mangalia shipyard in May of this year.
The Constanta County Court in Romania will meet the early August 2024 deadline for filing a claim against Damen Mangalia Shipyard. Damen owns 49% of the shares in Mangalia Shipyard as well as the management of the shipyard on the Black Sea coast, where about 70% of the shipbuilders have been repatriated due to skilled unemployment due to a lack of orders for the shipyard.
Mangalia shipyard was initially known as the Santierul Naval 2 Mai Mangalia and started building new ships in 1976. In 1997, Daewoo-Mangalia Heavy Industries S.A. took control of the shipyard and shifted its focus to building large container ships, bulk carriers and tankers.
In 2018, Damen took over the majority stake (51%) in Damen Shipyards Mangalia from Daewoo under the condition to pass a 2% stake to the Romanian state (represented by state-owned Santierul Naval 2 Mai company) in exchange for the management right. However, the agreement conflicts with legislation passed by Romania in 2023, under the country’s commitments taken under the National Resilience Facility and as part of the steps taken towards OECD membership.
Damen claims that since taking over the Mangalia Shipyard, it has established the shipyard as one of the top five shipyards in Europe with three dry docks as far as offshore manufacturing is concerned, especially in the offshore wind industry. It also said that this cooperation with the Romanian government, which was already difficult, is now facing a unilateral change, which is not only a breach of contract by the Romanian government, but also a crisis of confidence. It was stated that the Romanian government has not proposed any solution to the conflict brought about by the new corporate governance law.
Damen has asked the Vienna International Court of Arbitration (VIAC) to terminate the joint agreement reached in 2018, according to a document submitted by Damen to the VIAC, while a sizable sum of compensation has been filed in the document, without specifying whether the compensation is to be paid by the Romanian government or by Santierul Naval 2 Mai.