Fears have been raised over the future of a Methil yard as owners Harland and Wolff teeter towards administration after running out of money.
Belfast-based Harland and Wolff declared themselves insolvent on Monday after days of mounting speculation regarding the company’s cash-flow difficulties.
The Titanic shipbuilder employs around 200 workers in Fife and also operates the former BiFab yard on the Isle of Lewis.
It is understood external investors are interested in taking on the yards owned by Harland and Wolff, which remain fully operational for now.
But unions have warned the yards must not be “cherry-picked” by private investors.
It secured an agreement last month to extend a loan facility with existing lenders by £19.5m to £109.3m.
All four yards owned by Harland and Wolff will continue to trade throughout any administration process as these are regarded as “other companies” within the group.
Harland and Wolff close to administration
Harland and Wolff is was working with administration company Teneo.
They said they were “insolvent on a balance sheet basis” and contingency planning was underway.
Russell Downs is a restructuring expert brought in to help the company.
He said: “The group faces a very challenging time given the overhang of significant historic losses and its failure to secure long term financing.
“Good progress has been made to test the market for investor appetite.
“The board has reluctantly concluded the company’s own future as an AIM-listed company will likely come to an end in the near future, but the core operations undertaken by the four yards… will continue to trade as usual.
“It is important to recognise this is extremely difficult news for the company’s staff directly affected and will impact many others within group.
“We will work to support our staff through this transition.
“Unfortunately, extremely difficult decisions have had to be taken to preserve the future of our four yards.
“This will clearly be very unwelcome news for shareholders who have shown significant commitment to the business over the last five years.
“The board, the senior management and rest of the team are committed to deliver the best outcome for the four yards and communities they serve to ensure their continued operation into the long term under new ownership.”
MP on ‘strategic importance’ of Methil yard
Labour MP for Glenrothes and Mid Fife, Richard Baker, said it was vital the unions, Scottish and UK governments were involved from the beginning to secure the future of the yards.
He said: “There is serious interest from other firms looking to take on the yards, including Methil.
“These yards are of strategic importance to the UK.
“Securing the key role of the Methil yard is vital for Fife and Scotland if we are going to fulfil our ambitions to expand our renewables sector and become a leader in green energy.
“Unions are right to highlight the strategic importance of these yards and this is why this process must be a priority for both UK and Scottish Ministers.
“When we have more details about the preferred options for the future of the yards, it is vital all stakeholders are involved and the process moving forward recognises their importance not only to the defence sector, but the wider renewable and marine sectors too.”
Unions warn workers at ‘beck and call’ of private interests
STUC General Secretary Roz Foyer said: “Last week we warned Grangemouth would happen again if workers and our industry were still at the beck and call of private interests. Today confirms that.
“The Methil and Arnish yards should be a hub for renewables but once again corporate mismanagement and a market-led approach to energy has failed workers and communities in Scotland.
“It is now crucial the Scottish and UK Government act together to ensure that the yards are retained, and invested in, if we are to generate renewable energy jobs in Scotland.”
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