Harland & Wolff Appoints Liquidator

Get the Editor's Digest for Free

Roula Khalaf, editor of the Financial Times, picks her favourite stories for this weekly newsletter.

British shipbuilder Harland & Wolff said on Monday it had appointed Teneo to liquidate the “insolvent” holding company, five years after it was rescued from administration.

But the AIM-listed company, best known for building the Titanic, said tenders for the group's four shipyards across the UK were being finalised and it expected sales to be agreed within weeks.

“Contingency planning for the issuance of an administration order and the appointment of Teneo directors is now underway for the company. This process is likely to begin this week,” the company said in a statement, adding that it expected “no return to shareholders” and that an unspecified number of jobs would be lost.

The 163-year-old shipbuilder has been struggling to survive since the UK's new Labour government in July rejected an application for a £200m emergency loan guarantee as an inappropriate use of public money.

However, Health & Welcom said it saw a “credible path” to maintaining its main shipyard in Belfast and three others in Britain, the Ailing gas storage project in Northern Ireland, and delivering a contract to the Ministry of Defence where it is a partner in a consortium led by Spain’s Navantia.

The company said the deadline for bidding for the yards is this week, and it hopes to reach an agreement in the coming weeks.

Although only a small number of bidders were expected to emerge for security reasons, defence industry sources said a mix of strategic British and international bidders, including Spain’s Navantia, were in the running. They said it was unlikely the shipyards would be sold together.

John Wood, the former CEO who rescued the company from administration in 2019 before exiting at the end of July, is in talks with financial backers about making an offer, according to people familiar with the situation.

Unite, the union representing most of the workers at H&W’s shipyards in Belfast and Appledore in southwest England, said its preferred option was to “secure a single buyer for all of the company’s shipyards”. It said the buyer should be a company with a history of shipbuilding, not “a private investment company looking for short-term profit”.

If a suitable buyer is not found, “the government must be prepared to step in,” said Irish regional secretary Susan Fitzgerald.

The company employs around 1,200 people across its sites. Up to 60 of those are expected to lose their jobs at the holding company. Unaudited results published in July reported an operating loss of £24.7m in 2023, down from a loss of £58.5m in 2022.

Interim chief executive Russell Downs said the impending administration “will undoubtedly be very unpleasant news for shareholders, who have shown great commitment to the business over the past five years”.

Monday's statement confirmed a Financial Times report that the company is now investigating the “misuse” of more than £25 million of funds.

After the loan guarantee defaulted, H&W's US lender, Riverstone Credit Partners, stepped in with $25 million, but no additional funding was obtained and “trading was difficult given the large value of the delinquent creditors,” the company said.

Matt Roberts, national officer at the GMB union, said workers' lives were “in shambles because of chronic failures in industrial strategy and mismanagement by companies”.

Leaving these vital – and crucial – arenas [Ministry of Defence] “The contract, with all its promises to build ships in the UK, is not enough,” he added. “The government must provide the support and oversight to get the market to the solution we need.”

A UK government spokesman said the government had been clear that “the market is currently best placed to meet these challenges” but was working with all parties to protect operations and jobs.

Wood and Navantia did not immediately respond to requests for comment.