The chief executive of Harland & Wolff has resigned as the struggling Belfast shipbuilder seeks to negotiate an emergency loan to stave off collapse, according to several people familiar with the situation.
The departure of John Wood had been expected as a condition of a £20 million (€23.7 million) new loan being discussed with its existing Wall Street lender, Riverstone Credit Partners, according to these people. H & W currently has a $115 million (€105 million) credit facility with the US group on which it pays 14 per cent interest.
Wood announced his departure in an overnight text message to directors, according to one manager at the company. H & W and Wood did not respond to a request for comment on Friday morning.
Jonathan Reynolds, business secretary, is set to update the House of Commons on Monday about the situation at H & W.
Earlier this week the Financial Times reported that the government was poised to turn down a request from H & W for a £200 million loan guarantee to help it secure fresh funding from a group of commercial banks at a lower interest rate than the credit facility with Riverstone, which matures at the end of December.
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Figures in the government’s business department confirmed officials were in close contact with the company and its lender, and were confident a solution would be found that removed the immediate risk of administration.
The company could be broken up and put up for sale unless the new loan is agreed, people with knowledge of the talks added.
Unions have warned about the potential impact on jobs if the company fails to secure new financing. H & W employs about 1,500 people across four sites, at Belfast, Appledore in Devon and Methil and Arnish in Scotland.
Officials admitted that jobs were “clearly a major concern” but they affirmed the government’s commitment to shipbuilding across the UK and said they were keeping very close to the situation as it developed.
Wood’s departure would pave the way for an agreement on the new financing arrangement with Riverstone, said one person familiar with the talks.
He was at the helm of a £6 million rescue of the Titanic shipbuilder from administration in 2019, and had touted progress in turning the company around.
The company had won part of a £1.6 illiobn contract to build new Royal Navy ships, but has failed to publish audited accounts and its Aim-listed shares have been suspended since the start of this month. – Copyright The Financial Times Limited 2024
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