Fabrication company Harland & Wolff – which operates the former BiFab yard in Methil, Fife – has secured an emergency loan as it faced collapse.
The Titanic shipbuilder employs around 200 workers in Fife and also operates the former BiFab yard on the Isle of Lewis.
Last month an application by the company for a £200 million government loan guarantee was knocked back.
The newly elected Labour government said this was due to “a very substantial risk that taxpayer money would be lost”.
The decision put the company at risk of collapse and being broken up.
However, a financial lifeline has been secured. The business has extended a loan facility with existing lenders by £19.5m to £109.3m.
It said this “improves and stabilises the liquidity position of the company and its subsidiaries”.
Pledge to focus on ‘core’ business
The crisis-hit business has terminated the employment of its chief executive John Wood. It has also formally engaged Rothschild & Co as financial adviser to assess “strategic options for the group”.
It is also withdrawing all passenger services between Penzance and the Isles of Scilly with immediate effect.
The firm said: “The company remains focussed on growing the business in its four key delivery centres (Belfast, Appledore, Methil and Arnish).”
Chairman Malcolm Groat added: “We are grateful to our lenders in continuing their funding commitment to support Harland & Wolff Group’s ongoing stabilisation and long-term strategy objectives.”
Harland & Wolff in Fife
Harland & Wolff saved Methil’s BiFab yard from administration when it bought it out in 2021.
It promised to bring up to 1,000 jobs but laid off dozens of workers last year.
That followed the termination of a contract to build eight wind turbine jackets due to escalating costs.
The yard produced its first sea vessel since 1856 a year ago as part of a £18.1m deal to produce 23 barges.
Earlier this year, it revealed new plans to invest £270m in its two Scottish shipyards. It said this would create 400 new jobs in Fife.
But the company was plunged into crisis in May as it emerged then chancellor Jeremy Hunt planned to block a £200m loan guarantee from Westminster-backed UK Export Finance (UKEF).
Matt Roberts, national officer for GMB Union, said: “GMB is pleased Harland and Wolff’s financing has been confirmed and received.
“Now the company can focus on its core business and what we know GMB members can deliver.”
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