Dozens of jobs will soon be at risk as Titanic shipyard Harland & Wolff is set to plunge into administration.
The Belfast ship builder – which manufactured the iconic ship before it tragically sank in 1912 – has confirmed its non-core operations are being wound down, and between 50 and 60 immediate redundancies are expected.
The company’s collapse would mean British warships being built by a foreign yard for the first time in the Royal Navy’s history.
Harland & Wolff had hoped to carry out work on the fleet solid support (FSS) warships that transport crucial supplies such as ammunition and food to aircraft carriers.
But, according to Business Matters the situation could force the Ministry of Defence (MoD) to rely on Navantia the Madrid-based primary contractor that partnered with Harland & Wolff, to complete the work in Spain.
The company’s future has been uncertain since mid-July when Labour blocked a £200million lifeline saying that it would be an inappropriate use of public funds.
Bosses wanted to borrow cash from a consortium of UK banks, but needed the Government to act as guarantor that is prepared to repay lenders.
The company that built the Titanic, Harland and Wolff, is set to go into administration. It expects between 50-60 immediate redundancies
Picture shows the Titanic being launched from a shipyard in Belfast in May 1911
The White Star liner ‘Titanic’ in course of construction at the Harland and Wolff shipyard in Belfast
Harland & Wolff, which employs more than 1,000 workers across four UK sites, had been in talks with Conservative ministers for more than a year.
But Labour decided not to sign off the guarantee according to reports earlier in the summer.
It is the latest in a long line of crises for the Belfast yards, which have declined from their prime time when they employed as many as 20,000 people.
Harland & Wolff has long scrambled to find funding to upgrade the shipyards, holding months of tense negotiations.
The manufacturer, which famously built the ill-fated Titanic, has four shipyards – one in Belfast, two in Scotland (Methil on the Firth of Forth and Arnish on the Isle of Lewis) and one in England (Appledore in north Devon).
Despite the expected job losses, staff employed at its four shipyards are not due to be affected.
A company statement said: ‘A full review of all group holdings commenced in July and has concluded that H&W Group Holdings PLC is insolvent on a balance sheet basis as per its last audited accounts and most recent management accounts.’
Insolvency practitioners Teneo will act as administrators and shares will be delisted.
The company is part of a consortium that landed a major contract to build new fleet solid support ships for the Royal Navy.
Sir Keir Starmer’s (pictured) Government has reportedly decided that it would be an inappropriate use of public funds to keep the business afloat
RMS Titanic being fitted out at Harland and Wolf Shipyard, Belfast, 1911-1912
It said all shareholders in Harland & Wolff are likely to lose their money but so far 20 companies have stepped forward to express interest in buying parts of the business according to someone with knowledge of the talks, reported The Guardian.
The administration process will be confined to the holding company, Harland & Wolff Group Holdings PLC, and the operational companies which run the yards are expected to continue trading.
It had applied for a £200 million loan guarantee from the Government as part of efforts to restructure its finances.
However, the Government decided in August not to act as a guarantor on the lending – while also ruling out direct funding to maintain the company’s liquidity.
A hydraulic hammer working on the Olympic (Titanic sister ship) at Harland & Wolff shipyard in Belfast
The RMS ‘Titanic’ in drydock about to be launched at Harland & Wolff shipyards
The ill-fated White Star liner, Titanic, in dry dock at the Harland and Wolff shipyard
Harland and Wolff interim executive chairman Russell Downs said the group had faced a ‘very challenging time’ due to historic losses and a failure to secure long-term financing.
He said: ‘It’s important to recognise that this is very difficult news for staff and will affect many within group.
‘We will work to support our staff through this transition.
‘We also know that it will be very unwelcome news for shareholders who have shown significant commitment to the business over the last five years.
‘The board, the senior managers 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.
‘Unfortunately, extremely difficult decisions have had to be taken to preserve the future of our yards.
‘Despite the recent challenges, the four yards have a strong capability, under new ownership and with the continuing support of their customers, to deliver UK-based ship building and leading UK-based renewables employing over 1,300 committed personnel.
‘It’s critical that the business comes through its financial troubles to secure an enduring legacy worthy of its name and its past for the benefit of the UK as a whole and its communities in particular.’
Ulster Unionist MLA Andy Allen said it is ‘crucial’ the Government supports the shipyard in finding a new owner.
He said: ‘While this outcome may have seemed increasingly likely in recent months, we must find a solution that not only keeps this historic shipyard in east Belfast, but allows it to grow and thrive.
‘The yard is more than just a historic landmark; it has a vital role to play in our national defence, particularly in shipbuilding and maintenance.
‘Given its strategic importance to our defence infrastructure, the Government must act quickly and decisively to secure its future.
‘The workforce’s skills and expertise are invaluable, not just to the yard itself but to our broader economy and defence capabilities.’
He added: ‘I will continue to work with colleagues, both here and in Westminster, to ensure every support is given to finding a new owner that will make a clear commitment to building on Harland and Wolff’s historic success.
‘The Government must actively engage with all interested parties and prioritise this issue.
‘We must ensure the yard and its workforce have a viable and sustainable future.’