Romania’s Damen Shipyards Mangalia, one of the largest in Europe, is struggling to get out of trouble. Sources revealed that Romanian authorities are in advanced negotiations with Turkish shipbuilder Desan to lease production facilities and labor at Damen Shipyards Mangalia.
Desan is currently looking to expand its shipbuilding capacity and Damen Shipyards Mangalia’s existing dry dock facilities meet its expansion requirements, meaning the shipyard would be a potential option for Desan.
The news of Desan as a “potential investor” has been confirmed by Romanian Economy Minister Bogdan Ivan, who stressed that the negotiations are aimed at restarting the shipyard operations and ensuring that the wages of shipyard employees can continue to be paid. If the negotiations are successful, the investor will be responsible for the operation of the shipyard and maintain economic activities.
Bogdan Ivan added: “Damen Shipyards and Desan are in direct negotiations regarding the transfer of assets and liabilities. However, no official results have been announced yet.”
Damen Shipyards Mangalia is known to have been established in 1976, with South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (now Hanwha Ocean) taking over the yard in 1997 and holding a 51% majority stake. As Daewoo Shipbuilding & Marine Engineering was in financial crisis, Damen Group acquired all the shares held by Daewoo Shipbuilding & Marine Engineering in 2018.
Soon after, Damen Group reached a joint agreement with the Romanian government, agreeing to transfer 2% of its shares to Santierul Naval 2 Mai, a state-owned enterprise controlled by the Romanian government, in exchange for the management rights of the shipyard. After the equity transfer was completed, Santierul Naval 2 Mai’s shareholding ratio reached 51%, becoming the largest shareholder of the shipyard.
However, due to a new corporate governance law (Law No. 187/2023) passed by the Romanian government in 2023, the Romanian government no longer abides by the agreement on the operation and management of the shipyard, and Damen Group has lost the management rights of Damen Shipyards Mangalia. For this reason, Damen Group has announced that it would withdraw from Damen Shipyards Mangalia.
In May last year, Damen Group filed for bankruptcy of Damen Shipyards Mangalia and formally initiated bankruptcy proceedings in June of the same year. The shipyard is still in bankruptcy. Before the bankruptcy, the shipyard had experienced a three-year order drought. Damen Group said that since taking over Damen Shipyards Mangalia, it has built the shipyard into one of the top five shipyards in Europe in the field of offshore engineering manufacturing (especially the offshore wind power industry), with three dry docks.
Currently, Damen Shipyards Mangalia is in financial difficulties and as of February 28, 2025, more than 200 workers have been laid off and more than 1,000 employees are technically unemployed, a status quo that will last until May 31, 2025.
While there has been investor interest in the shipyard, concerns about long-term viability remain. Although it has been proposed to lease the ship to ease the difficulties, shipyard worker representatives remain skeptical.
Romanian trade unions said: “A four- to five-year temporary lease does not solve the underlying structural problems of the shipyard. Employees are worried that the delay in finding a lasting solution will lead to long-term operational instability. The internal conflict between the Romanian government and Damen Group is one of the reasons for the deadlock. The two shareholders failed to cooperate effectively, which led to a breakdown of trust.”
Notably, in addition to filing a bankruptcy petition, Damen Group has filed documents with the Vienna International Court of Arbitration (VIAC) requesting that the VIAC terminate the joint agreement reached with the Romanian government in 2018, along with a claim for €500 million.