Britain presses Spanish group to bid for Harland & Wolff’s UK shipyards

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The UK government is seeking to persuade the Spanish defence company Navantia to bid for four shipyards owned by Harland & Wolff, as ministers try to avoid job losses at the struggling British shipbuilder.

Ministers are aiming to convince Navantia to take on the four H&W yards located in Northern Ireland, England and Scotland, according to people briefed on the matter. 

They added the government is keen to protect the 163-year-old company’s workforce of about 1,200 people who are spread across the four sites: the flagship yard in Belfast that made the Titanic, plus Appledore in Devon and two Scottish facilities at Methil and Arnish. 

This month Aim-listed H&W, whose shares have been suspended since July, announced it was preparing to enter administration and was investigating the “misapplication” of more than £25mn of corporate funds. 

However, H&W’s yards function as separate entities that can be kept operating at the point when the listed company enters administration. 

State-owned Navantia is interested in acquiring the Belfast yard, partly because it is working closely with H&W on a Royal Navy contract, according to people familiar with the situation.

In 2022 Navantia led a consortium also involving H&W that won a £1.6bn contract from the British government to build three new Royal Navy support ships.

The contract should result in the first ship being finished at H&W Belfast’s yard in more than two decades, in a significant boost to Northern Ireland’s manufacturing industry.

Ministers are now trying to persuade Navantia to also purchase H&W’s other three yards.

The government was “hoping that Navantia will pick up the entire package, even though they have less of an interest in the other three sites, and you’d expect it to be a knockdown price”, said one person familiar with the situation.

In July the government refused to hand H&W a lifeline by rejecting its request for a £200mn loan guarantee to help lower interest payments on the company’s borrowings.

H&W, which has pivoted to a range of energy, renewables and cruise liner refurbishment activities, more than tripled its revenues in 2023 and halved its operating losses to £24.7mn.

But the company ran into difficulties as interest payments on its borrowings rose 50 per cent to £18.4mn. It is saddled with expensive debt provided by a US fund.

Russell Downs, interim executive chair at H&W, wants all four yards to be sold together, and is hoping to wrap up a deal within weeks.

He said the company “will provide an update when it’s appropriate to do so”.

Trade union leaders are concerned about preserving jobs. Some 600 of the H&W workforce are employed in Belfast, which has been ramping up preparations for the Royal Navy supply ship contract.

John Wood, the company’s former chief executive who rescued H&W out of administration in 2019, has expressed an interest in bidding for the company, said people close to the matter. He declined to comment.

The government, Navantia and Rothschild, the company’s adviser, declined to comment.

Teneo, which has been lined up to put H&W into administration, also declined to comment.