Harland & Wolff heads for administration

Harland & Wolff, the shipyard that built the Titanic, is set to fall into administration for the second time in only five years.
In a statement, the Belfast-based company said a review had concluded that Harland & Wolff Group Holdings, its holding company, was “insolvent on a balance sheet basis”.
The administration process will be confined to the holding company and the operational companies that run its four shipyards and its gas storage facility in Islandmagee, Co Antrim, will continue to trade.
Some “non-core” staff are being made redundant and “non-core operations”, including its Scilly Ferries, marine services and businesses in the United States, will be wound down or sold off.
Administrators from Teneo are likely to be appointed this week and the company’s listing on Aim, London’s junior stock market, will be cancelled, wiping out shareholders. The company, which employs more than a thousand people, warned that further redundancies were inevitable.
The business has struggled to keep up with competition and is overdue on its debt. It was rejected for a £200 million emergency credit facility by the government in July.
“Since the rejection of the company’s request for a UK Export Finance facility in July, the group’s outlook has been challenging given a very high level of overdue sums owed to creditors and material losses across its business activities,” Harland & Wolff said.
It sent its chief executive on immediate leave in July and its finance chief stepped down last week.
Trading of the company’s shares has been suspended since July, pending finalisation of its 2023 accounts on a going concern basis.
The pressure increased last month when the government of the Falklands Islands sacked Harland & Wolff as its preferred bidder to build a new £120 million floating port.
Russell Downs, the interim executive chairman, said: “Unfortunately, extremely difficult decisions have had to be taken to preserve the future of our yards. Despite the recent challenges, the four yards have a strong capability, under new ownership and with the continuing support of their customers, to deliver UK-based shipbuilding and leading UK-based renewables, employing over 1,300 committed personnel.”
The board said there was a “credible pathway” for its shipyards — in Belfast, Methil in Fife, Arnish on the Isle of Lewis and Appledore in north Devon — to continue trading under new ownership. Several parties had expressed interest in buying some or all of the group’s units that hold the shipyard sites, it said, adding that a first-round bid deadline was due shortly.
The plight of Harland & Wolff, whose yellow cranes are a feature of Belfast’s skyline, brings further into doubt the future of a group famous for centuries of shipbuilding in the city. Opened in 1861, the business employed about 35,000 people at its peak during the Second World War. It was once the world’s most prolific builder of ocean liners and also produced HMS Belfast, which is moored on the Thames in London.
The company was nationalised in 1975, before returning to private ownership in 1989. It built its last ship in 2003, a ferry called MV Anvil Point for the Ministry of Defence, and since then has been focused on oilrig refurbishment and offshore wind turbine production. It went into administration in 2019 but was acquired out of insolvency.
A government spokesperson said: “While we know this will be a concerning time for those affected, Harland & Wolff has been clear this process will in no way affect jobs at its shipyards or core operations such as delivering its contracts for the Ministry of Defence.
“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 and across the rest of the UK and protects jobs.”
Harland & Wolff said that a meeting of shareholders would be required to decide on a request from certain investors that a representative of theirs be made a director.
PwC, the accountancy group, and Simmons & Simmons, the law firm, are looking into claims that £25 million of spending of customer deposits has been “misapplied”.