Dutch shipbuilding group Damen Shipyards Mangalia in Romania has been awarded two ship repair contracts during its insolvency. The shipyard is one of the largest shipyards in Europe and one of the largest shipbuilding and repair bases in Romania.
According to the contract, the first vessel, named M/T Tahiti, was built in 2014 under the flag of Malta with a length of 274.5 meters and a deadweight of 157,022 tons. The main works included mechanical and electrical repairs and the installation of a silicone system on the hull.
The other is the M/T Hadal Sally, a Malta-flagged chemical/product tanker of 50,994 tons deadweight and 183 metres in length, which was built in 2009. The main work is to spray special coatings on the hull breaches. Maintenance work on both vessels will be carried out simultaneously for a period of one month at the end of September this year.
“This step is also important from the perspective of the international market, where confidence in a shipyard’s capacity is crucial,” said Sofien Lamiri, Managing Director, Damen Shipyards Mangalia.
It is understood that Mangalia was established in 1976, and South Korean shipbuilder Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering, DSME) took over the shipyard in 1997 and held a 51 percent majority stake. However, as DSME fell into a financial crisis, Damen Shipyards acquired all the shares held by DSME in 2018. Shortly afterward, Damen Shipyards entered into a joint agreement with the Romanian government, agreeing to transfer a 2% stake to Santierul Naval 2 Mai, a state-owned enterprise controlled by the Romanian government, for no consideration in exchange for the shipyard’s management rights. Upon completion of the transfer, Santierul Naval 2 Mai’s shareholding reached 51%, making it the largest shareholder in Mangalia.
Damen Shipyards currently owns 49% of the shares in the Mangalia as well as management rights on the Black Sea coast. As a result of the previous three-year order drought, about 70 percent of the shipyard’s 1,500 employees have been repatriated due to skilled unemployment.
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.
In this regard, Damen Shipyards has submitted the bankruptcy application of Mangalia at the end of May this year and formally started the bankruptcy procedure in June. In addition, according to the documents submitted by Damen Shipyards to the Vienna International Court of Arbitration (VICA), Damen Shipyards has requested the VICA to terminate the joint agreement reached in 2018, while asking for €500 million in compensation.