Harland & Wolff is in the process of another change in leadership after the UK Government rejected the Belfast shipyard owner’s bid for a guarantee on £200 million of loans from commercial lenders.
Restructuring expert Russell Downs is to become its new executive chairman after group chief executive John Wood stepped aside on Friday.
The company is also now engaging with Rothschild & Co “to assess strategic options for the group”.
It followed confirmation that the UK’s Department for Business and Trade has rejected its application under the UK Export Finance Export Development Guarantee (EDG) scheme.
Harland & Wolff had sought UK Government backing as part of its efforts to obtain a £200m loan from commercial lenders.
The EDG scheme typically offers lenders a government-backed guarantee on up to 80% on the risk of a loan.
A 100% guarantee had also been discussed between the company and government for a period.
Harland & Wolff is under financial pressure after reporting losses of £113m across 2022 and 2023.
The group’s leadership wants to refinance a high interest $115m (£88m) debt facility it currently holds with New York-based Riverstone Credit Partners.
Harland & Wolff stands to earn hundreds of millions from a lucrative Ministry of Defence (MoD) deal.
Its subcontract with Spain’s Navantia to build fleet solid support (FSS) vessels for the MoD could be worth around £750m, but production for the seven-year programme is not due to start until 2025.
The company was forced to temporarily suspend trading in its shares at the start of July after accounting issues meant it was unable to file audited accounts on time.
In response to the UK Government rejection, Harland & Wolff said it had expedited discussions with Riverstone “in order to secure alternative new debt facilities to support the near-term working capital needs of the business following its recent significant revenue growth”.
The company said: “These alternative financing arrangements are expected to close within the next few days.”
Harland & Wolff said it remains in active dialogue with the UK Government “around existing and future contracts and the long-term capitalisation plan for the business”.
Alongside the appointment of Russell Downs, the group said Alan Fort will be joining its board as a non-executive director.
In a statement, the incoming new executive chair, said “I am very pleased to take on this role after a challenging period for the group as it transitions from one leadership team to another and deals with the increasing speculation over its future.
“The great weight of responsibility for all stakeholders involved in the business to secure a long-term future is crystal clear to me and I am enormously honoured to be given the responsibility to find a solution.
“I will be working tirelessly in consultation with employees, management, customers, suppliers, unions, government agencies and other stakeholder groups in the coming weeks.”
