Harland & Wolff appoints administrators to wind up the company

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UK shipbuilder Harland & Wolff said on Monday it had hired Tenio to wind up the “insolvent” holding company five years after it was rescued from administration.

But the Aim-listed company, best known for building the Titanic, said bids for the group's four yards across the UK were being finalized and expected sales had been agreed within weeks.

“Contingency planning is underway for the company to make an administrative order and appoint an administrator from Teneo. This process is likely to start this week,” it said. It saw “no return potential for shareholders” and an unspecified number of jobs would be lost.

The 163-year-old shipbuilder has been struggling to stay afloat since the UK's New Labor government in July rejected a request for a £200mn emergency loan guarantee as an inappropriate use of public funds.

However, H&W said it saw a “credible path” to awarding its flagship Belfast yard and three of its other yards in Britain, its Islandmagee gas storage project in Northern Ireland and a Ministry of Defense contract where it is a partner. A consortium led by Spain's Navantia.

The company said bids for the yards were due this week and it expected a deal to be finalized in the coming weeks.

While only a small number of bidders were expected to emerge for security reasons, defense industry sources said a mix of British and international strategic bidders was underway, including Spain's Navantia. They said yards are unlikely to be sold together.

John Wood, the former chief executive who rescued the company from administration in 2019 before exiting at the end of July, is in talks with financial backers about making a bid, according to people familiar with the situation.

Unite, the union representing most workers at H&W's yards in Belfast and Appledore in southwest England, said its preferred option was to “secure a single buyer for all the company's yards”. It added that the buyer must be a company and have a history of building ships, rather than “a private equity outfit looking for a short-term gain”.

Irish regional secretary Susan Fitzgerald said if the right buyer could not be found “the government must be prepared to step in.”

The company employs approximately 1,200 people across its sites. As many as 60 people at the holding company are expected to lose their jobs. Unaudited results published in July reported an operating loss of £24.7m in 2023, down from a loss of £58.5mn in 2022.

Interim executive chair Russell Downs said the incoming administration “will obviously be extremely unpleasant news for shareholders who have demonstrated a significant commitment to the business over the past five years.”

Monday's statement confirmed a report in the Financial Times that the agency is now investigating the “misappropriation” of more than £25 million of funds.

After the loan guarantee debacle, H&W's US lender, Riverstone Credit Partners, stepped up with $25mn but no further funding materialized and “trading has been challenging due to the significant value of overdue creditors”, the company said.

Matt Roberts, national officer of the GMB union, said “workers' lives are being thrown into disarray by a chronic failure of industrial strategy and corporate mismanagement”.

“Leaving this vital yard – and important [Ministry of Defence] The deal with all its commitments to UK shipbuilding — not good enough at the mercy of the market. The government must provide support and oversight to get the solutions we need to market,” he added.

A spokesman said the UK government was clear that “at present, the market is best placed to address these challenges” but that it was working with all parties to protect operations and jobs.

Wood and Navantia did not immediately respond to requests for comment.