Last month, the UK government refused to grant a much-needed £200 million loan to the country’s centuries-old shipbuilder Harland & Wolff, leading to the resignation of its chief executive, John Wood, and putting the shipbuilder at risk of going bankrupt again. Currently, Harland & Wolff is trying to avoid receivership and has announced that it has secured an important loan.
Harland & Wolff said it has reached an agreement with existing Wall Street lender Riverstone to extend its credit line, which pays 14 % interest, to £110 million ($140 million) from £90 million ($110 million). The agreement means a glimmer of life for Harland & Wolff as a bankruptcy crisis looms.
Harland & Wolff has been forced to suspend trading in its shares on the London Stock Exchange’s Alternative Investment Market (AIM) for failing to meet the June 30, 2024 deadline for announcing its 2023 results. The British government’s refusal to provide financial assistance to Harland & Wolff at a time when the company is in deep financial trouble has led to the announcement of the immediate resignation of the man in charge of the company and sparked fears of massive layoffs, dealing a fatal blow to the long-forgotten, century-old shipbuilding company.
Although Harland & Wolff’s management has been interested in restarting its shipbuilding business, however, the progress has not been smooth, and most of the projects currently in hand are offshore contracts and ship repair contracts. And the industry has been rumored that the CEO of a U.S. restructuring investment company is interested in acquiring Harland & Wolff’s Belfast Shipyard, which may be developed into a ship repair base in the North Atlantic Ocean, but there is no substantive news yet.
Russell Downs, a former partner and restructuring specialist at accountancy firm PwC, has taken over as CEO on an interim basis following the departure of John Wood. In addition to Russell Downs, Alan Fort, who currently works for Celsa UK, the steelmaker, has been proposed to join the Harland & Wolff board as a non-executive director. Other board members, including chief financial officer Arun Raman and non-executive director Malcom Groat, will remain in place.
With a history of more than 150 years, Harland & Wolff is one of the oldest shipyards in the shipbuilding industry and is best known for building the Titanic. Publicly available information shows that Titanic began construction at Harland & Wolff on March 31, 1909, was launched on May 31, 1911, and completed on April 2, 1912 for sea trials. Titanic was the world’s largest and most luxurious cruise ship at that time.
Harland & Wolff is known to have suffered several tough times and several closures.In the summer of 2019, the shipyard declared bankruptcy and entered administration. It then emerged from bankruptcy under new management and worked to revitalize the business. Currently, Harland & Wolff employs about 1,500 people, of which about 600 are located at the Belfast shipyard, with two other smaller shipyards located in Scotland and England.