Financial Times article 1 of 22 Oct 2019 20:50
Financial Times
Titanic builder Harland and Wolff thrown lifeline in £6m deal UK energy infrastructure group InfraStrata agrees deal to buy shipyard from administrators The frigate deal throws a potential lifeline to Belfast’s Harland and Wolff © Paul McErlane/Reuters Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Save Arthur Beesley in Dublin and Archie Hall in London YESTERDAYPrint this page14 Harland and Wolff, the Belfast shipyard that built the Titanic, has been saved from collapse after UK energy infrastructure group InfraStrata agreed a £6m deal to buy the struggling business from administrators. InfraStrata said the agreement would save the jobs of the remaining 79 Harland and Wolff workers who did not opt for voluntary redundancy earlier this year. In a statement on Tuesday, InfraStrata said it planned to increase the size of the workforce “by several hundred over the next five years”. Harland and Wolff employed 123 when it entered administration in August, casting doubt over a business that traces its roots back to 1861 and whose two yellow cranes, Samson and Goliath, dominate the Belfast skyline. The shipyard, which once provided work for 35,000, had struggled to win business in recent years. InfraStrata’s sole major current project is a planned gas storage plant at Islandmagee, Co Antrim. The company plans to use Harland and Wolff’s personnel and fabrication facilities to build steelwork, pipelines and structural equipment for the plant. It estimates that bringing this work in-house cuts costs by 15 per cent, more than the expense of acquiring Harland and Wolff. John Wood, chief of InfraStrata, said Harland and Wolff was a landmark asset. “While our core priority will be to deliver our flagship project in Islandmagee, we believe there are opportunities to welcome potential new clients due to the diverse skill set at the facility.” InfraStrata has put down a £500,000 deposit for Harland and Wolff, and plans to pay the remaining £5.5m in two tranches, concluding in April 2020. In the infrastructure group’s most recent annual report, released in January, it generated no cash and its auditor raised concerns about its ability to continue functioning without external funding. To cover the Harland and Wolff deal, InfraStrata has secured a £2.2m loan agreement, from which it has withdrawn £700,000 for the initial deposit. The majority of the remainder offered in the agreement comes at an undetermined interest rate, chosen by the lenders. Mr Wood described these terms as “unfavourable”. He noted that InfraStrata had “two compelling different offers on the table, two more still being negotiated”, and that the company had secured a €1.6m grant from the EU. Recommended UK manufacturing Northern Ireland’s Wrightbus collapses The acquisition will eventually be funded with a mixture of debt and equity, skewed towards debt, according to Mr Wood.
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