The famous Harland & Wolff shipyard, which built the Titanic, has scrapped the planned Scilly Ferries service even before its launch. It did so to face the financial turbulent it was going through and entered into a £20 million loan agreement to keep the company afloat. Now, the company will concentrate on its core shipyards with continued marine services.

The shipbuilder Harland & Wolff, which is known worldwide for building the Titanic, has scrapped its plans for a fast ferry service to the Isles of Scilly. The Atlantic Wolff fast ferry that was scheduled to start sailing this summer will never now take on passengers. This follows the Belfast company’s increasingly tough time over finances, leaving enforced cutbacks in activities it deems not core to its business.

Harland & Wolff announced Thursday that it would shut down its Scilly Ferries division and unveiled a new financial rescue plan. The group, joined by its creditors – US investment firm Riverstone at the helm – agreed on arranging a £20 million loan to enable it to get through the current financial crisis.

The Atlantic Wolff was to go into service for Scilly Ferries in May. Assigned to carry passengers from Penzance to St Mary’s on the Isles of Scilly and back, the new ferry reached Cornwall in July. Now the company will return this ferry to its supplier, the Netherlands-based Damen Group. Harland & Wolff said it will contact directly all those customers who booked tickets on the Atlantic Wolff.

Speaking on the decision to axe the Scilly Ferries service, interim executive chair of Harland & Wolff, Russell Downs said it was against the background of its financial position that it could be described as having been “overly ambitious”. Downs, who took over from John Wood in July, said it would be tough news for those people looking forward to the service and for the community it was to have benefited.

Formerly of Harland & Wolff, Downs has also put it lackadaisically that this shutdown is not representative of general company operations but rather a specific problem. He said that Harland & Wolff was still carrying out its core activities in ship repairs and building ships when commissioned by clients.

Even as Scilly Ferries ‘ operation terminates, Harland & Wolff ‘s Marine Services will be retained its commercial division that offers ferry services for its cargo need back and forth the mainland and the Isles of Scilly. And it provides work boats to different United Kingdom and European projects. In other words, while this ferry service stops, other parts of it remain unaffected.

Harland & Wolff has struck a fresh loan agreement with its lenders in a bid to save its finances from total collapse. The company had been trying to secure a £200m loan guarantee with the government but the new Labour administration has now ruled that out. Instead, the company will have to depend on its lenders to support its finances.

Under its new deal with creditors, Harland & Wolff, including Riverstone, shall increase the existing loan by $25 million, about £20 million, increasing the loan amount to a total of $140 million. To this end, this loan is meant to better the financial situation of the company and enable it to keep its balance in the aftermath.

It has appointed financial advisers from Rothschild & Co to look into its options – some reports suggest it could consider breaking up its business or selling it piecemeal. Harland & Wolff chairman Malcolm Groat used the opportunity to thank the lenders for their ongoing support. He said that he looked forward to working with Rothschild & Co in a move that will help the company get to its goals.

Groat also gave thanks to the now former CEO, John Wood, for guiding the company through their bleakest moment in 2019. Wood will depart from the company now due to the terms of the deal chalked out by the lenders.

In short, Harland & Wolff’s decision to call off the Scilly Ferries Service has been taken in line with the company’s efforts at focusing on core shipyards and addressing challenges on its finances. The new loan is expected to be handling the company’s finances as it continues its marine services. The future of the company is still foggy, and it may change or sell out some of its assets any time.