Shipyard in hands of banks

Two British banks, Barclays and Lloyds TSB, which have so far failed to respond to a £199 million sterling (€325 million) claim by Harland & Wolff now hold the balance of the shipyard's future in their hands, according to senior industry officials.

The claim relates to a long-running battle to recover additional costs on two drill ships that were originally constructed by the Belfast shipyard for the US group Global Marine. Harland & Wolff lodged a £130 million claim more than three years ago against its former customer.

The total cost of the original contract for the two ships, Glomar Jack Ryan and Glomar C R Luigs, had been £197 million. But the Belfast shipyard argued that Global Marine was responsible for any increases in the contract price and any slippage in delivery times.

In response to this, Global Marine counterclaimed that the drill ships had not been completed on time or to their specification.

The drill ships were delivered to Global Marine two years ago but the former business partners ended up in the London High Court after a sideline dispute concerning a £21 million final payment.

The Texan group was ordered to pay the sum to Harland & Wolff by the High Court after it failed in a bid to persuade the House of Lords in the UK to grant it permission to appeal an initial ruling.

The £199 million claim against Barclays and Lloyds TSB is the latest instalment in the drill ships dispute. Global Marine does not now own the drill ships, although it continues to lease them. Two holding companies, a subsidiary of Barclays Bank, BMBF (No 12), and Nelstar, a subsidiary of Lloyds TSB subsidiary, now hold the legal titles to the drill ships.