Spanish shipbuilder Navantia is planning to reach a rescue agreement with Harland & Wolff, a century-old British shipbuilder famous for building the Titanic. The agreement could be formally reached as early as next week, saving more than 1,000 jobs.
According to Sky News, a local British media, Navantia has been approved to take over the group’s four shipyards in the UK.
With the support of the British government, Navantia will pay tens of millions of dollars to acquire Harland & Wolff’s assets, while also receiving a renegotiated contract worth 1.6 billion pounds from the Belfast company to build three fleet supply ships (FSS) for the British Royal Navy.
An insider revealed that the government has reached a “compromise” with Navantia on the Spanish company’s request to increase Harland & Wolff’s current value by 300 million pounds. Sky News quoted British government sources as saying that the arrangement has not yet been finalized and is still subject to change.
Navantia declined to comment. A government spokesman said: “We will continue to work with a wide range of parties to find a solution for Harland & Wolff that will enable the development of shipbuilding and manufacturing in Belfast, Scotland and across the UK while protecting jobs. We cannot comment further on commercial matters.”
Harland & Wolff, which built the Titanic, is an AIM-listed shipyard. Due to its rising debts and failure to obtain a £200 million loan from the UK government’s export credit agency (UK Export Finance, UKEF), the shipyard entered bankruptcy administration for the second time in four years in September. Previously, Riverstone, an existing Wall Street lender, had provided Harland & Wolff with about $25 million in additional funds, but this was not enough to get the company out of bankruptcy administration.
Harland & Wolff was already “battered” before announcing its second bankruptcy administration. Harland & Wolff was forced to suspend trading of its shares on the London Stock Exchange’s Alternative Investment Market because it failed to announce its 2023 results by the deadline of June 30, 2024. In July, the British government refused to provide it with a £200 million export development guarantee (EDG). The person in charge of Harland & Wolff immediately announced his resignation, which triggered concerns about a large number of layoffs. Subsequently, two non-executive directors announced their resignation. In September, Harland & Wolff’s Chief Financial Officer Arun Raman announced his resignation with immediate effect.
It is reported that Harland & Wolff has a history of more than 150 years and is one of the oldest shipyards in the shipbuilding industry. It is famous for building the “Titanic”. Public information shows that the “Titanic” was started on March 31, 1909 at Harland & Wolff, launched on May 31, 1911, and completed the sea trial on April 2, 1912. The “Titanic” was the largest cruise ship in the world at that time with the most luxurious internal facilities.
The collapse of Harland & Wolff could not only lead to thousands of job losses, but also jeopardize a major contract for the Royal Navy at a time of heightened geopolitical tensions around the world. Northern Ireland Economy Minister Conor Murphy said in October that Navantia, a partner on the Royal Navy contract, was the “ideal company” he was looking for to acquire the troubled shipyard.