Harland & Wolff creditors ‘unlikely to be repaid in full’

Harland & Wolff’s leading executive has failed to meet an administrator-imposed deadline to provide a statement of affairs at the troubled shipbuilder, which is now not expected to be able to repay creditors.
Russell Downs, the group’s executive chairman, has asked administrators at Teneo to extend the deadline to November 5.
A report by the administrators said that Downs “was notified on 2 October 2024 that he is required to make out and deliver a statement of the company’s affairs to us by 15 October 2024”.
Harland & Wolff fell into administration in September after a review concluded that the beleaguered shipbuilder had no long-term funding available from the group or its lender to support ongoing costs.
Downs was appointed as interim chairman in July after Harland & Wolff’s former chief executive John Wood took a “leave of absence”. Downs, a restructuring expert, was one of the administrators who worked on the collapse of Lehman Brothers and was a special manager on Carillion’s liquidation.
Advisers at Teneo have been managing Harland & Wolff’s administration and have been collecting claims from creditors. A report published on Wednesday detailed how the shipbuilder fell into administration and how much it owes its creditors.
The shipbuilder’s finance provider, Riverstone Credit Management, is unlikely to get full repayment of £156.7 million it lent out, according to administrators. Before Harland & Wolff fell into administration the American asset manager had been keeping the shipbuilder afloat with loans at 14 per cent interest.
Teneo said that it is unlikely that proceeds from the asset disposal process will cover Harland & Wolff’s debts to Riverstone fully.
Harland & Wolff first borrowed from Riverstone in 2021, when the lender offered the company a loan of $35 million. In August this year, as the shipbuilder struggled to keep itself afloat, Riverstone provided it with $25 million in emergency funding. Riverstone had already supplied the company with a $115 million facility.
Administrators at Teneo said: “Based on currently available information, we do not expect there will be sufficient asset realisations to repay the secured creditor in full.”
The report from Teneo added that there were no wages arrears but that there are around 48 claims worth around £130,800 relating to accrued and untaken holidays.
Harland & Wolff’s listing on Aim was cancelled when it fell into administration, wiping out the company’s shareholders. Teneo said “it is unlikely that sufficient funds will be realised to enable a distribution to be made to unsecured creditors”.
The group’s shipyards in the UK have continued to trade despite the administration process as they are held in separate operating companies.
Downs is said to be working with Rothschild bank to sell Harland & Wolff’s four shipyards. It is understood that Navantia, the Spanish shipbuilder, is the frontrunner to purchase some of Harland & Wolff’s sites.
However, there are concerns about job losses at Harland & Wolff’s shipyards in Scotland and Devon as Navantia is understood to have expressed interest in buying only the shipyard in Belfast. Harland & Wolff also has sites in Appledore, Devon, and Methil and Arnish in Scotland.
The company, which employs more than 1,000 people, said that some “non-core” staff were being made redundant and that non-core operations, including its Scilly Ferries operation, marine services arm and its business in the United States, will be wound down or sold off.
Teneo declined to comment.