Methil shipyard owner Harland & Wolff (H&W) has announced it expects a UK Government decision on a lifeline £200 million taxpayer-backed support package after Thursday’s general-election.
If the vote goes as polls have predicted, the decision would rest with a new Labour government.
Belfast-based H&W has also suspended trading of its shares due to delayed publication of its annual report.
Harland & Wolf’s market value has plummeted to less than £14.5m
In May, claims the current Chancellor Jeremy Hunt may block a critical loan guarantee led to shares in H&W slumping by nearly one-third.
It left the whole company – best known for building the Titanic – worth less than £18m.
Shares have fallen further since then and the firm is now valued at less than £14.5m.
According to The Times, there was a “row” between government departments over H&W’s export development guarantee application.
But a UK Government spokesman and the company itself insisted talks were “ongoing”.
It came just a few weeks after H&W said it expected to create at least 200 new jobs at Arnish, on Lewis, and 400 in Methil, through a £270m investment in its two Scottish shipyards.
Announcing results for 20123 today, H&W said: “The company has been in discussions with UK Export Finance (UKEF) since Q3 ’22 for a proposed £200m facility.
“During FY23, a significant amount of work was done and, accordingly, an announcement was made on December 20 2023 stating the facility was approved subject to a commercial rate review and ministerial consents.
“Further work continues on this facility and the company expects UK Government to reach a decision after the general-election.”
Harland & Wolff says ‘material delays’ over deal will adversely impact its ability to carry out major projects
H&W then warned: “Should there be any material delays to securing the facility post the general-election, the company’s ability to execute new and large contracts would be adversely affected.
“The company continues to engage with UK Government and will make an announcement in due course.”
H&W warned last September it needed UKEF’s support to refinance a credit facility.
It added: “Should the company not be successful in raising these additional funds and continues to retain its current cost base, a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern.”
Auditors included the “material uncertainty” in their opinion of the group’s accounts for 2022.
As of June 30 2023, H&W’s net debt stood at £88.3m. This was after a loan from Riverstone Credit ballooned from £28m to £79m.
H&W’s latest accounts show pre-tax losses narrowed to £43.08m last year, from £70.80m in 2022. Revenue skyrocketed to £86.91m, from £27.75m previously.
The company said it was on track to achieve revenue of £200m in 2024.
And it highlighted an increase in headcount to more than 1,500 people across its yards, from 1.010 at the end of last year.
Chief financial officer Arun Raman said he was “highly encouraged” by the growth in revenue.
But he warned: “Our financing costs are high, exacerbated by the rises in the base rate in FY23.
“It is crucial to close the UKEF facility as soon as possible in order to provide the stable long-term working capital needed for securing large, multi-year contracts. Our engagement with UK Government continues in order to bring this deal to closure.”
H&W said its latest annual report was delayed by the “complex nature of some of the contracts under which the company is working”, affecting revenue allocation. The firm now expects to publish its report sometime next week.
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