The boss of Harland & Wolff, the owner of the stricken Belfast shipyard that built the Titanic, has resigned as the company casts around for emergency funding to avoid collapsing into administration for the second time in five years.
John Wood was already widely expected to leave the company under conditions laid down by financiers as part of the terms of a potential £20m loan to secure the immediate future of the shipbuilder, which employs 1,600 people.
But Wood, who led a £6m rescue of the company in 2019, announced his sudden departure in a text message to directors overnight on Thursday, according to a report in the Financial Times.
Harland & Wolff declined to comment.
The shipbuilder was forced to suspend its London-listed shares a fortnight ago, raising concerns about its future. It has missed two deadlines to file audited accounts, raising questions over its finances and its ability to fulfil a £1.6bn contract to build the three “fleet solid support” ships that will carry supplies such as ammunition and food to the navy’s aircraft carriers.
The crisis poses the first significant test of industrial policy for the new Labour government in London.
The previous government had provisionally approved a partial bailout, under which the state would underwrite 100% of a £200m loan to the company by a consortium of lenders.
Labour is understood to have decided not to approve the plan, despite Harland & Wolff reducing its requested loan guarantee to 80%.
The company’s remaining directors are now reportedly locked in talks with the company’s Wall Street backer, Riverstone Credit Management, with which it already has a $115m credit facility, charging an interest rate of more than 14%.
Senior directors are expected to update staff on the progress of talks at lunchtime on Friday. If the loan is not agreed, the shipbuilder could be broken up and sold.
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Wood was at the helm of a 2019 rescue deal, when the shipyard was bought out of administration by Infrastrata, an energy company listed on London’s Alternative Investment Market.
Infrastrata rebranded under the Harland & Wolff name, and turned its focus to rebuilding the shipyard. It also bought the Appledore shipyard in Devon, and the Methil and Arnish yards in Scotland.
However, the company has struggled financially with the investments needed to make the yard ready for a big contract. It was in talks with the UK government over a £200m loan guarantee. The guarantee would have allowed the company to refinance its £190m in debt and other liabilities.
