UK Shipbuilder and repairer Harland & Wolff has gone into administration for the second time in five years.
The London-listed company suspended trading of its shares at the start of July, and said on Friday that investors should not expect “any returns” at the end of a review of the business.
Gavin Park and Matt Cowlishaw, of Teneo, have taken over as joint administrators of the parent group, Harland & Wolff Plc.
Each of the four subsidiary companies operating the four yards, located in Belfast; Appledore, Devon; Methil, Fife; and Arnish on the Isle of Lewis, were not placed into administration and will continue trading.
Former CEO John Wood who left in July had failed to get a UK Government guarantee that would have kept the company afloat.
Newswires have reported that in a Q&A session with Russell Downs, a restructuring expert who took over following the departure of Wood, the BBC has reported that one shareholder asked: “As directors, you have a fiduciary duty to act in the best interests of the company.
“Bearing this in mind, why did you not wait for Rothschild to complete their strategic review before moving towards administration?”
Downs replied: “We thought long and hard about the decision we had to take and, ultimately, it became the inevitable conclusion that, given the company’s insolvency on both a balance sheet and a cash flow basis, it was the right thing to do.
“Whilst that brings about the end, in all likelihood, of the company’s trading shares, it does not preclude the fact that shareholders still own the company and the administrator, in due course, will provide a full account of the value realised and how that is ultimately attributed.
“For my part, we tried. We kept the business going as long as we can [sic].”
He added that he continued to believe “that holding the group together is the way to drive the best value for all stakeholders”, rather than selling off individual yards.
It was also reported that the company had also confirmed it had begun to investigate an alleged misuse of customer payments worth more than £25 mill under its former boss. Wood dismissed the allegations as “ridiculous.”
In recent weeks, Harland’s senior management – assisted by Rothschild – have started talks with potential buyers, with Spanish shipbuilder and repairer, Navantia emerging as the frontrunner.
Navantia is involved in the £1.6 bill contract to build supply ships for the UK’s Royal Navy, which would have been constructed at Belfast but are now in doubt.
