Spanish shipbuilder Navantia is racing to finalize a takeover of the stricken shipyard owner that built the Titanic amid urgent talks to rework a major government contract.
Navantia is trying to negotiate more favorable terms for a deal to build three Fleet Solid Support (FSS) ships for the Royal Navy as part of the Harland & Wolff (H&W) purchase, Sky News has learned.
H&W’s London-listed parent company collapsed into administration in September after a request for taxpayer support was rejected.
A number of parties, including FTSE 250 contractor Babcock International, have expressed interest in a deal, but Navantia – which is already deeply involved in the fixed-satellite service program – has been considered the front-runner for some time.
Navantia is understood to have been providing funding liquidity to H&W on a weekly basis since the company filed for administration, and this week’s payment was said to have been due last Friday.
A source close to the Spanish company said the fate of more than 1,000 workers at H&W’s four UK shipyards now hinges on the government agreeing to renegotiate the FSS contract “on more realistic terms”.
The British and Spanish governments have also been involved in discussions about the prospective deal, according to Whitehall sources.
They added that it would likely include job guarantees if the UK government agreed to reconsider the FSS deal.
If finalized, a final deal could be announced as soon as the latter part of this week.
H&W’s four shipyards are located in Belfast; Appledore, Devon; Arnish on the Isle of Lewis; And methyl, fife.
Under the deal tentatively agreed in recent days, Navantia will acquire all four shipyards although it only has a current interest in the Belfast site.
The company had raised nearly £150 million in loan form from Riverstone, a US-based trust.
It has endured a long period of management turmoil, with Russell Downs, an experienced executive, taking over as interim executive chairman in July.
Downes recently said he had ordered an investigation into what he described as an apparent “misapplication” of more than £25 million of corporate funds.
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Rothschild’s bankers have been running a sale process to gauge interest in the company and its assets since September.
Teneo acts as administrator for the London-listed parent company, but it was not clear whether the four shipyards would be sold on a solvent basis or through a prepackaging department.
Founded 163 years ago, Harland & Wolfe built the most famous passenger ship in maritime history, with the Titanic sinking on its maiden voyage across the Atlantic in 1912.
The Department of Business and Trade has been contacted for comment, while neither H&W nor Navantia could be reached for comment.