The two gigantic yellow arches dominate the skyline in Belfast, Northern Ireland. Nicknamed “Samson and Goliath,” they are used to lift the gigantic pieces used in shipbuilding at the Harland & Wolff shipyard. They have also become a symbol of a company on the brink of collapse.
At the end of June, the company failed to deliver audited accounts for 2023, leading to the suspension of its share listing on the London Stock Exchange. It is heavily indebted and has accumulated poor results. In 2023, it made a loss of £43 million (€50.3 million), according to its unaudited accounts. By 2022, it had already lost £70 million.
The company, which employs 1,500 people, had hoped to refinance itself with a £200m government-backed loan. Talks were underway, but the new Labour administration of Prime Minister Keir Starmer announced in late July that the government would not get involved, citing “a considerable risk that taxpayers' money will be lost”.
£110m debt
The firm's chief executive, John Wood, resigned and in early August the group announced it was winding down non-core operations, including a new fast ferry service to the Isles of Scilly. It also reached an interim solution with its main lender, US fund manager Riverstone, to borrow an additional £20m. Its debt now stands at £110m, at a prohibitive interest rate of 14%.
This is not the first time that Harland & Wolff has encountered financial difficulties. Founded in 1861 by Edward James Harland and Gustav Wolff, the company quickly found itself at the head of one of the largest shipyards in Europe. “It specialized in the construction of ocean-going liners, says Edward Shaw, a shipbuilding expert at the University of Liverpool. It is notably at the origin of the Titanic. »
To stand out from its competitors, “It acquired a lot of unproven technology from other shipyards, getting into heavy debt”he says. This allowed him to revolutionize the construction of ocean liners, notably by replacing the wooden deck with iron, a stronger material, and by creating flat-bottomed hulls, with greater capacity.
During the Second World War, the firm built a significant proportion of the British Army's warships, tanks and bombers, including the famous HMS Belfast, which played a key role in the D-Day landings. At its peak, it employed 35,000 people in Belfast, London, Liverpool, Glasgow and Southampton. But financially, it never really managed to get its head above water. “She always struggled to repay her debts”Edward Shaw says.
You have 49.76% of this article left to read. The rest is reserved for subscribers.
Source: Lemonde
