Titanic Shipyard Owner Harland & Wolff Set to Enter Administration This Week

(Bloomberg) —

The owner of the shipping yard that built the Titanic is entering administration, a type of insolvency procedure in the UK, for the second time in five years. 

Harland & Wolff Group Holdings Plc, which has been on the brink after Britain’s new Labour government rejected the struggling business’s appeal for state support, confirmed the move on Monday.

The process will likely start this week, according to the company’s statement, with Teneo lined up as administrators. Harland & Wolff will cut some jobs and wind down non-core operations, including a ferry service on the Isles of Scilly — which lie to the south west of England — and a small business in the US. More job cuts could follow in core areas.

The company’s assets have attracted the attention of defense companies including Babcock International Group Plc, according to reports published last week, with advisers from Rothschild & Co. leading a sale process. Monday’s statement said a “number of parties” have expressed interest in buying some or all of its subsidiaries.

The company sought emergency funding earlier in the summer to avoid falling into administration for a second time, having previously collapsed in 2019. However, Labour ministers rejected a £200 million ($264 million) loan facility that had been provisionally agreed by the Conservative administration that they defeated in the July 4 election. That prompted the Harland & Wolff Chief Executive Officer John Wood to leave his role. 

UK-based InfraStrata bought Harland & Wolff out of administration in 2019 as part of a wider bet on the industry. But a very high level of overdue sums owed to creditors and material losses across its business activities make the outlook for the group challenging, according to Monday’s statement. 

As part of the attempts to grow the business, the firm joined a consortium led by Spain’s Navantia SA that won a contract to build three ships for the Royal Navy. The company has been in contact with the Spanish firm on the terms of a plan to be able to resume work on that project in the Belfast yard.

Unite, a trade union representing workers at Harland & Wolff’s Belfast and Appledore dockyards, issued a statement demanding urgent action to preserve the future of the company’s workforce. The union expressed a preference for a single buyer for all the company’s yards and called on the UK government to intervene if the right buyer isn’t found.

Jobs in the shipyards won’t be affected by the administration process, a government spokesperson said in an emailed statement. They added that the private sector was in the best position to resolve the situation, rather than leaning on taxpayers.

© 2024 Bloomberg L.P.

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up