Embattled Harland & Wolff has declared insolvency and said its status as a London-listed company will “likely come to an end in the near future,” leading to job losses across its sites in the UK.
The Aim-listed shipyard, which has a 1,500-strong workforce, said steps were now underway to reduce headcount in “non-core” and certain “central support areas” of the business, having been announced to staff earlier this morning.
Administrators from Teneo will be appointed this week, it added, while advisers Rothschild and Co are assessing on strategic options amid interest from a number of suitors. Reports suggest Babcock, Spain’s Navantia and former chief executive John Wood could be weighing up bids.
The board confirmed to markets that shareholders would likely receive “no return” from the administration process, which is expected to commence this week.
The group’s core operations and its Islandmagee Gas Storage project will continue to run as normal, although a number of its non-core subsidiaries are in the process of being wound down.
The announcement puts the future of a key £1.6bn Ministry of Defence contract to build warships for the Royal Navy at risk, raising serious questions about the future of Britain’s shipbuilding industry.
It comes after months turmoil following the new Labour government’s decision not to guarantee a £200m UK Export Finance loan seen as central to Harland & Wolff’s continued operation. Shares in the Belfast-based firm have been suspended since July, after it failed to publish audited annual accounts.
Interim chair Russell Downs, who was appointed following John Wood’s exit, said: “The group faces a very challenging time given the overhang of significant historic losses and its failure to secure long term financing. Good progress has been made to test the market for investor appetite.
“The board has reluctantly concluded that the Company’s own future as an AIM-listed company will likely come to an end in the near future, but that the core operations undertaken by the four yards and Islandmagee will continue to trade as usual.
He added: “It is important to recognise that this is extremely difficult news for the Company’s staff directly affected and will impact many others within group. We will work to support our staff through this transition. Unfortunately, extremely difficult decisions have had to be taken to preserve the future of our four yards.
“This will clearly be very unwelcome news for shareholders who have shown significant commitment to the business over the last five years.
It is the second time the company, which built the Titanic in its prime, has entered administration in recent years. It was bought by the London-based energy firm Infrastrata in 2019, in a deal worth £6m.
More to follow.