One of Belfast's largest shipyards, Harland and Wolff, employs around 1,500 people and was seeking state aid. The company was asking for a governmental guarantee, which would have provided a loan of up to £200 million. This means it would have enabled the company to borrow money, but the government guaranteed to pay the money back to those lending it if the company could not. However, the government refused this facility on the grounds that it was too risky for the taxpayers.

Government's Decision

The move was explained by the Business Secretary, Jonathan Reynolds. He stated that the move had been taken by him after a detailed perusal of the books of the company and the government risk policies. There has been no nod for offering the shipyard any emergency funding either. The government has rather felt that the market should take care of the financial issues within the company.

What Happened Next

Last Friday, Harland and Wolff stated their request regarding government aid had been turned down. The chief executive has also left his job at the company. The company is now negotiating with its lender, Riverstone, to possibly acquire further funding soon. Mr. Reynolds states that Riverstone knows the amount of losses incurred through assets and people from Harland and Wolff. Thus, it only seeks reasonable solutions.

Solution Sought

Mr. Reynolds said he welcomed the new financing for Harland and Wolff and that he wishes success to the new management team. With all these events, there are yet many doubts that surround the long-term future of the company. The shares of Harland and Wolff are suspended at the present time since they failed to file audited accounts on time.

The company has brought in Rothchilds bank to consider options including the possibility of even selling the business. Harland and Wolff is primarily based in Belfast though it also has yards in England and Scotland. In 2023, the company formed part of a group that won a significant contract to build three support ships for the Royal Navy. This entailed huge investment and large losses.

Financial Struggles

Harland and Wolff had been borrowing at exorbitant interest from Riverstone, but they were confident that with a government guarantee, they would be able to refinance these loans and even raise more at a cheaper interest rate. Mr. Reynolds said, "Although it is confirmed that Harland and Wolff remains an integral subcontractor to the Royal Navy project, the Ministry of Defence watching its progress very closely."

Union Concerns

The vast majority of the workforce at Harland and Wolff are members of the union Unite. The union's Sharon Graham said the shipyards were of strategic importance and the workforce should be recognised as such. She called on politicians to stop "chasing" investors only interested in short-term gain and to instead secure stakeholders committed to the future of the shipyards.

Matt Roberts of The GMB Union joins in airing his concerns, saying these are "worrying times" for workers and their families. He stressed that the yards must be saved and secured for the future.

Calls for Government Commitment

East Belfast MP Gavin Robinson first noted the uncertainty thrown up by speculation around the loan guarantee. He added that while Government decided not to go ahead with a loan guarantee due to value for money concerns, existing contracts - including a £1.6bn Ministry of Defence contract to build support ships - placed the shipyard in a better position than it was five years ago when facing administration.

The future of Harland and Wolff remains in the balance, though some hope exists that new funding and management might stabilize and make the firm successful.