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The crisis affecting the shipyard that built the Titanic has deepened when its boss resigned and confirmed it will not receive a £200m lifeline from the Government.
As the future of Harland & Wolff hangs in the balance, the company announced yesterday that its chief executive, John Wood, will “take a leave of absence” with immediate effect.
He will be replaced on an interim basis by veteran accountant Russell Downs, who worked in the administration of Lehman Brothers.
He also revealed that ministers would not provide a loan guarantee, which was seen as key to keeping the 162-year-old business afloat.
Harland & Wolff said it is in talks with its current Wall Street lender, Riverstone Credit Management, and expects to secure new financing within days.
Crisis: As Harland & Wolff’s future hangs in the balance, the company announced that its chief executive, John Wood, will “take a leave of absence” with immediate effect
It is also considering other “strategic options” that could involve putting itself up for sale.
Downs said: ‘The huge weight of responsibility that all stakeholders involved in the business have in securing a long-term future is crystal clear to me and I am hugely honoured to have been given the responsibility to find a solution.
“I will work tirelessly in consultation with employees, management, customers, suppliers, unions, government agencies and other stakeholder groups in the coming weeks.”
Earlier this week, the Belfast-based company insisted no decision had been made on a government guarantee after reports suggested Prime Minister Sir Keir Starmer was planning to block the move, deeming it an inappropriate use of public funds.
Under its plans, the group sought to borrow money from a consortium of UK banks, but needed the government to act as guarantor. That means if the loans went bad, the state would step in to repay the lenders. The group hoped to get a guarantee on 80 per cent of the £200m loan.
Business Secretary Jonathan Reynolds is expected to make a statement on Harland & Wolff on Monday.
The update adds to the ongoing saga at Harland & Wolff, which was forced to suspend its shares from trading in London last month when it failed to file audited accounts.
And Labour’s decision will raise alarm bells over the company’s future ability to fulfil a £1.6bn contract to build Royal Navy ships in the UK, which could be built in Spain if the deal closes.
It would be the first time in British naval history that a warship was built by a foreign shipyard.
Harland & Wolff was acquired by investment firm InfraStrata in 2019.
But losses hit £70m in 2022, which were its last audited annual accounts.
Other crises causing headaches for Starmer include Tata Steel’s plans to cut 2,800 jobs, Royal Mail’s move into foreign hands and Dyson’s consultancy on 1,000 job cuts.
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