Business

Spain’s Navantia ‘on the brink’ of completing £70m rescue deal for Harland & Wolff – reports

Government-backed deal is expected to include four yards and guarantees around job security

The Harland and Wolff cranes in Belfast
The Harland and Wolff cranes in Belfast (Liam McBurney/PA)
By Ryan McAleer

Spain’s state-owned shipbuilder Navantia is on the brink of completing a £70 million rescue deal for Harland & Wolff, according to reports.

Sky News has reported that the UK government-backed deal could be announced by ministers later this week, following months of negotiations.

It will see Navantia pay around £70m to take control of Harland & Wolff’s four shipyards, including Belfast, with guarantees to retain the existing workforce for a set period.

The board of the Spanish shipbuilder is expected to meet this week to ratify the deal.

It’s understood Navantia has been providing cash to keep the four shipyards in operation since the collapse of their London-listed parent company Harland & Wolff Group Holdings in September.

Around 1,000 people are currently employed across the four sites.

The deal is expected to produce improved terms for the Navantia-led consortium awarded a £1.6 billion UK Government contract to build three fleet solid support (FSS) vessels for the Royal Navy.

The original plan for the FSS work involved the fabrication of sections of the ships in Harland & Wolff’s Appledore shipyard in Devon and in Navantia’s yard in Cádiz, with final assembly taking place in Belfast.

The contract was understood to be worth around £700m for Harland & Wolff.

It had been reported that Navantia wanted the UK Government to increase the value of the contract by £300m.

The collapse of Harland & Wolff followed its failure to secure the backing of the new Labour government to provide a guarantee on £200m of new borrowing in a bid to refinance its high interest loan with Riverstone.

The company had turned to the New York-based lender in a bid to support its significant spending to scale up the business.

The high up-front costs left Harland & Wolff with £113m in losses across 2022 and 2023.

A recent report from the administrators at Teneo revealed Riverstone is owed around £158m.