Harland and Wolff: Shipyard support was ‘too risky for taxpayers’

The offer of financial support to Harland and Wolff carried a “very significant risk that taxpayers’ money would be lost”, the government said.

The loss-making shipbuilder has applied for a loan guarantee of up to £200m.

This would allow the company to borrow money with the government acting as guarantor.

However, if the loans were to collapse, the government would have to step in to repay the lenders.

In a written statement, Business Secretary Jonathan Reynolds said: “This decision was based on a comprehensive assessment of the company’s financial profile and the criteria set out in our risk policies.

“We have also decided not to provide any form of emergency liquidity funding.

“In this case, the government believes that the market is best placed to resolve the commercial issues facing Harland and Wolff.”

On Friday, the company announced that its bid for state aid had been unsuccessful and that its CEO had left his job.

The company is now in talks with its lender, Riverstone, and hopes to agree further funding within days.

Mr Reynolds said that as part of the government’s engagement with Riverstone, the firm “recognised the importance of the assets at Harland and Wolff, as well as the people who work there, and demonstrated a desire to find pragmatic solutions to support the government’s objectives”.

“I welcome the potential new funding for Harland and Wolff and the appointment of new management and wish them all the best in their continued efforts to build this business.”

There are still questions about Harland and Wolff’s long-term futures.

The company’s shares are currently suspended after it failed to submit audited accounts on time.

It has appointed Rothchilds Bank to review strategic options, which could include selling the business.

Its main operations are in Belfast and it also has shipyards in Appledore in the West of England and Methil and Arnish in Scotland.

In 2023, she was part of a consortium that won a major contract to build three Royal Navy support ships.

The company had to invest heavily to prepare for this work, which contributed to its heavy losses.

She also took out loans from Riverstone, which charge a high interest rate.

He hoped to use the government guarantee to refinance these loans at a lower interest rate and to make other loans.

Mr Reynolds said Harland and Wolff remained a “key subcontractor” on the naval contract and the MoD was “working well” with the main contractor, Navantia, to monitor the delivery of the project.

Unite represents the majority of the company’s employees.

The union’s George Brash called for someone to take over the firm who has shipbuilding “at heart” rather than someone looking to “make a quick buck”.

“There was always a question mark over the yard … but we’re actually confident that a viable bidder will emerge,” he said.

“It’s a good business that has current and future contracts, so the potential is there. It’s a highly skilled workforce. It’s a historic site and we’re confident we can get a buyer,” he added.

Meanwhile, Matt Roberts of The GMB Union said “these are worrying times for workers and their families”.

“These courts need to be saved and their long-term sustainable future ensured,” he added.

East Belfast MP Gavin Robinson said he welcomed the clarity the government’s statement brought as to why the loan guarantee was not being offered.

“It is important that workers are clear about the reasons for this decision, given the inaccurate and unhelpful distractions of some in recent days,” he said.

“We now look forward with the clear assurance that the Government will remain committed to honoring the existing contracts awarded to Harland and Wolff and building a vibrant and successful shipbuilding industry in Belfast.”

Speaking on Radio Ulster’s Evening Extra, Manufacturing NI chief executive Stephen Kelly described the news as “disappointing” but said “you have to be confident”.

“There’s no question about it, there’s a potential for the whole thing to collapse,” he said.

“At the heart of it are 600 people here in Belfast who have world-class skills; skills that cannot be replicated and easily produced elsewhere.”

“There’s potential here that it could be split. There’s potential here that someone could come in and not invest in the business, but the opportunity is something that entrepreneurs often focus on … and that opportunity is just around the corner.” ” he added.