Harland & Wolff play down reports that future of Belfast shipyard is at risk

Shipyard owner says an application for a UK government loan guarantee has not been rejected

Harland & Wolff's Belfast shipyard.
Harland & Wolff's Belfast shipyard.

The owner of Belfast’s Harland & Wolff shipyard has played down speculation that its future is at risk over reports the UK government is about to reject its application for a £200 million loan guarantee.

The Times reported on Wednesday that Chancellor Jeremy Hunt had instructed officials to block Harland & Wolf Group Holdings’ application under the Export Development Guarantee (EDG) scheme.

The London-listed group, which also owns three other shipyards in Devon and Scotland, announced in December 2023 that it was seeking the backing of UK Export Finance’s EDG scheme, which offers lenders a guarantee of up to 80% of the risk on their loan.

It’s understood Harland & Wolff has asked for a 100% guarantee.

The bid for new finance came after the group disclosed a £70m loss for the 2022 trading year.

Harland & Wolf Group Holdings also announced its net debt increased to £82.5m in 2022.

The company stands to earn hundreds of millions after landing a number of potentially lucrative deals, including a subcontract with Spain’s Navantia to build fleet solid support (FSS) vessels for the UK Ministry of Defence (MoD).

The shipyard owner said it expects to earn around £750m from the FSS contract, but production for the seven-year programme is not due to start until 2025.

The group extended a corporate debt facility with New York-based Riverstone Credit Partners to $100m at the end of 2022.

Harland & Wolff is now pursuing UKEF backing via its EDG Scheme as it seeks a new credit facility from a syndicate of banks.

The UKEF scheme is designed to support businesses in unlocking working capital to invest in exporting.

According to The Times, Harland & Wolff has failed in that bid, meaning its MOD work under the FSS contract, could go to Spain.

But in a statement, Harland & Wolff claimed The Times report was “misleading and inaccurate”.

It said discussions were progressing “at pace” on the EDG, adding that the company’s management remain comfortable with the progress.

The company said it now employs in excess of 1,500 people and had made significant progress toward its goal of achieving revenues of £200m in 2024.

“We were disappointed to read this article and the reaction it has caused, given that we have grown the business to become a major player in the UK shipbuilding sector, whilst spreading our risk over multiple markets,” said group chief executive, John Wood.

John Wood, chief executive of Harland & Wolff Group Holdings
John Wood, chief executive of Harland & Wolff Group Holdings.

“Our EDG application has not been rejected and continues to be work in progress.

“I expect to be providing a fuller update on our refinancing plans in the next few weeks.”