Harland & Wolff in the balance as government explains lifeline rejection
The business secretary gives his reasons for turning down the crisis-hit shipbuilder's application for 拢200m in aid.
Monday 22 July 2024 12:33, UK
A financial lifeline will not be thrown to troubled shipbuilder Harland & Wolff (H&W) by the government due to a "very substantial risk that taxpayer money would be lost", it has been announced.
The company, which employs more than 1,500 people across its operations including its main yard in Belfast, had been in talks with the Department for Business and Trade over support including a £200m Export Development Guarantee.
In a written statement to MPs on Monday, Business Secretary Jonathan Reynolds confirmed the application had been rejected, saying such funding "would not necessarily secure our objectives".
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H&W, which has substantial debts, had warned on Friday that its bid for the taxpayer aid had failed but it remained in talks with lenders to secure new loan facilities. Those discussions were expected to last several more days.
At the same time, the company revealed that chief executive John Wood was to take a leave of absence with immediate effect.
His role was to come under the control of an interim executive chairman.
H&W said restructuring expert Russell Down would, in that capacity, oversee "a recapitalisation intended to give the company sustainable financial footing".
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It has struggled for years in the face of strong competition, particularly from Asia.
The shipyard was saved from closure in 2019 when it was bought out of administration for £6m by energy infrastructure firm InfraStrata.
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H&W is also still in discussions with key stakeholders, including the UK government, on the state of its existing and future contracts.
It secured a £1.6bn contract to build support ships for the Royal Navy last year.