Business

Spain’s state-owned shipbuilder Navantia agrees deal to buy Harland & Wolff

UK Government say deal, which is subject to regulatory approval, will secure 1,000 jobs

The UK's Business Secretary Jonathan Reynolds (inset) and a wide view of the Harland & Wolff shipyard in Belfast.
The UK's Business Secretary Jonathan Reynolds (inset) has said the government has approved Navantia's bid to buy Harland & Wolff's four shipyards.
By Ryan McAleer

Spain’s state-owned shipbuilder Navantia has agreed a deal to buy Harland & Wolff.

The UK Government said it will secure around 1,000 jobs in Belfast and three other yards in Britain.

The commercial agreement, which is subject to regulatory approval, is expected to be completed shortly.

The value has not yet been disclosed, but Sky News has reported it could be in the region of £70 million.

The Department for Business and Trade said it has agreed an amendment to the original £1.6 billion Ministry of Defence (MoD) contract won by a Navantia-led consortium that included Harland & Wolff.

The contract involves the construction of three fleet solid support (FSS) vessels for the Royal Navy in Belfast, Appledore and Cádiz.

The ships will be used to transport munitions, spares and supplies to UK aircraft carriers.

The original contract was understood to be worth around £700m for Harland & Wolff.

The UK government said the new deal “makes the minimum changes necessary to ensure Navantia can still deliver on the contract and build all three navy ships”.

“This deal is a major vote of confidence in the UK from Navantia, which will not only secure the future of UK shipbuilding but protect 1,000 jobs across the country and bring future investment into shipbuilding right across the UK,” said Business Secretary Jonathan Reynolds.

“National security is the foundation of our ‘Plan for Change’ – without it we can’t deliver on our milestones to raise living standards across the UK – with good skilled productive jobs.

“That is why we are steadfast in supporting the future of UK shipbuilding.

“This deal will guarantee our sovereign shipbuilding capability to bolster our navy and ensure the industry can continue to deliver economic growth and boost coastal communities right across the UK.”

Defence Secretary John Healey said the agreement keeps “vital” defence manufacturing in the UK and protects skilled jobs at the shipyards.

“It strengthens our sovereign capability to support Royal Navy operations worldwide, while building the industrial partnerships that will drive growth,” he added.

The Northern Ireland Secretary Hilary Benn said it represents “great news” for Belfast and the north’s economy.

“Harland and Wolff is an iconic, internationally-renowned company with a long and proud history,” he said.

“I am delighted that, with this deal, it will now have a bright future ahead.”

It’s understood Navantia has been providing cash to keep Harland & Wolff’s four shipyards in operation since the collapse of their London-listed parent company Harland & Wolff Group Holdings in September.

The collapse followed its failure to secure the backing of the new Labour government to provide a guarantee on £200m of new borrowing in a bid to refinance its high interest loan with Riverstone.

The company had turned to the New York-based lender in a bid to support its significant spending to scale up the business.

The high up-front costs left Harland & Wolff with £113m in losses across 2022 and 2023.

A recent report from the administrators at Teneo revealed Riverstone is owed around £158m.