Harland & Wolff at risk of losing £120m Falkland Islands port contract
Harland & Wolff is at risk of losing out on a £120m contract to redevelop a major port in the Falkland Islands, in what marks the latest struggle for the embattled company.
The Belfast-based shipyard, which in its heyday built the Titanic, was given “preferred bidder” status for the project by the Falklands government in early March.
But as it battles to stave off collapse after the new Labour government refused to guarantee a vital £200m loan, officials in the Falkland Islands are reconsidering the decision.
An “extraordinary” meeting will be held on Thursday by the Executive Council of the Falkland Islands (Exco), the policy making body of the territory’s government, in order to make a decision on next steps.
“Should the Falkland Islands government for any reason not proceed to contract Harland & Wolff, then an alternative plan can be implemented,” a statement reads.
It adds that no money had so far been paid to Harland & Wolff during pre-contract negotiations, which had sought to ensure commercial criteria for the tender was met ahead of Exco approval.
The contract had a potential value of between £100-120m and involved installing new floating pontoons to improve facilities at the port, which is based in the Falkland Islands’ capital Stanley.
Losing out on the project would be another major blow to the company. The shipyard is in the grip of last ditch talks with its Wall Street Lender Riverstone Credit Partners over an emergency £20m facility needed to prevent bankruptcy.
Chief executive John Wood’s departure nearly a fortnight ago was reportedly a condition of Riverstone providing the financing.
The firm’s Aim-listed shares are currently suspended due to accounting issues with its annual report. Discussions are ongoing with its auditors over how to recognise revenues related to the “multiyear and complex nature of some of the contracts under which the company is working”.
Harland & Wolff has forecast revenue of £200m by the close of full-year 2024. Some 90 per cent of the revenue is already contracted for this year, it has said.
The company did not respond to a request for comment, which included questions about whether the Falklands contract was included in its projects.
The department for business and trade was contacted for comment.