Shareholders in Harland & Wolff have accused the shipyard and both major political parties of misleading investors over its financial future.
The Belfast-based firm, famous for building the Titanic, revealed on Monday it would enter administration this week, following months of turmoil since the new Labour government rejected its application for a critical £200m loan guarantee in July.
Charles Scott, a 76 year old retired solicitor, said: “I’ve been relying on this to support me for the rest of my life and also perhaps allow me to rent, if not buy a property.”
“If this doesn’t go through, I’ll probably have to apply for bankruptcy and you know, I really relied and believed that the government would honour its commitments.”
Hundreds of investors have placed money into the business in recent years, after assurances from directors and the former Conservative government it was on the right trajectory.
When shares were suddenly suspended in July after Harland failed to file audited annual accounts, it left them unable to salvage their stakes. As the crisis began to unfold, the company played down reports Labour was poised to reject the £200m loan guarantee and stressed that any refusal would not spell the end.
Around 400 employees, some of which are also facing redundancy, are Harland & Wolff shareholders, according to people familiar with the matter.
The difficulty for many who have invested is that it seemed as if Harland & Wolff was turning around its fortunes. The firm won a major £1.6bn contract from the Ministry of Defence to build warships for the Royal Navy in January 2023. Its employee count also skyrocketed by around 900 per cent over the last half decade.
“Once they got the contract for £1.6bn, then that really cemented my thoughts, and probably a lot of other people’s thoughts about this going forward,” said one shareholder, who preferred to remain anonymous. The 71-year-old, a former employee at the Financial Ombudsman, said he would now have to come out of retirement to cover his losses, which are in the tens of thousands at least. “We can probably get by, but it will affect us massively,” he added.
Defending its decision not to guarantee the £200m support package, Labour argues it cannot risk taxpayer money on a company that has been treading water for years. However in doing so, it has left the future of Harland & Wolff’s employees and shareholders at the mercy of the private sector. Sky News reported defence contractor Babcock is among a number of suitors, including former chief executive John Wood, who was ousted in July amid the turmoil.
Shareholders have long been opposed to a pre-pack administration deal, which would see operations at the firm’s four key shipyards continue, but wipe out their investments. Their requests for an extraordinary general meeting (EGM) have been repeatedly blocked in recent months by the new leadership.
City A.M. understands a shareholder collective, which owns around 30 per cent of the company, is planning to boycott a meeting on Thursday called by Harland & Wolff’s interim chair Russell Downs. John Wood is also reportedly weighing up an injunction to try to stop the current plans for administration.
One engineering consultant in his mid-fifties, based in the South East, said he had intended for his investment to contribute towards retirement in a few years. “That entire plan is now scuppered as I now face the prospect of working several additional years to just recoup my losses,” he told City A.M.
“I am extremely frustrated and angry at how this situation developed and the various government assurances that the [£200m] UK Export Finance loan was accepted in principle, led to me to believe this was a relatively risk free investment and actually adding further to my holdings.”
“With shares suspended I was not able to sell my holdings, albeit at a significant loss.”
Harland & Wolff has been approached for comment
A government spokesperson said: “While we know this will be a concerning time for those affected, we are clear that following a thorough review of the company’s financial situation, at present the market is best-placed to address these challenges, and providing government funding would have meant a significant risk of losing taxpayer money.
“We are continuing to work extensively with all parties to find an outcome for Harland and Wolff that delivers shipbuilding and manufacturing in Belfast, Scotland andacross the rest of the UK and protects jobs.”