CEO of Titanic shipbuilder Harland & Wolff steps aside as debt crisis deepens

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Reuters
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BELFAST (Reuters) - The head of Belfast-based shipbuilder Harland & Wolff stepped aside on Friday as the firm said it was in urgent talks with its main lender to meet near-term financing needs while strategic options for its future are explored.

The shipyard, which built the Titanic over a century ago, is struggling with a high debt load and its shares were suspended on London's Alternative Investment Market (AIM) earlier this month after it failed to submit audited accounts.

Chief Executive John Wood is to take a leave of absence from his role with immediate effect and restructuring expert Russell Down has been appointed interim executive chairman to oversee "a recapitalisation intended to give the company sustainable financial footing," the firm said in a statement.

Britain's Department for Business and Trade has rejected a request for a 200 million pound ($258 million) Export Development Guarantee application, it said.

As a result, the company has "expedited discussions" with its main lender Riverstone Credit Management LLC "to secure alternative new debt facilities to support the near-term working capital needs of the business."

The alternative financing arrangements are expected to close within the next few days, it said.

The firm added, however, that it is also in active dialogue with key stakeholders, including the British government, around existing and future contracts and "the long-term capitalization plan for the business". Last year the firm secured a 1.6 billion pound contract to build support ships for the Royal Navy.

It said it is has engaged financial advisor Rothschild & Co to assess strategic long-term options for the Group.

The firm has struggled for years in the face of intense competition from shipbuilders in Asia and elsewhere. It employs over 1,500 people at heavy engineering facilities in Belfast, two Scottish-based yards and the Islandmagee gas storage project in Northern Ireland.

The shipyard was saved from closure in 2019 when it was bought out of administration for 6 million pounds by energy infrastructure firm InfraStrata.

($1 = 0.7741 pounds)

(Writing by Conor Humphries; Additional reporting by Amanda Ferguson; Editing by Susan Fenton)