Isles of Scilly sea ferry and air services - merged posts

[whole diary]

[stuving]

Atlantic Wolff has ceased trading (before it started).
Harland and Wolf have advised they've cased all Scilly operations.

It's reported on local radio, but nothing on the BBC^» (British Broadcasting Corporation - home page) web as yet.
Cornwall Live (complete with many clicks) https://www.cornwalllive.com/news/cornwall-news/live-scilly-ferries-announce-sudden-9451528

This is part of a deal to allow the main business to avoid administration, by cutting non-core activities. I guess the backers are saying "no point investing in the future if you go bust this year". From City AM:

Harland and Wolff: Titanic shipbuilder staves off collapse after securing emergency £20m loan
By: Guy Taylor

The Belfast shipyard said it had entered into agreements with lenders to increase its existing credit facility by $25m (£19.5m).
...
However, the announcement was followed by a decision from the shipyard to withdraw its Scilly Isle ferries service, which runs between the islands and Penzance.

In a statement, Harland said it would be “winding down business lines that are deemed to be non-core for the company” as it looks to cut costs.

The new Scilly Ferries service was set to run its first trips on 22 July, but kick-off was delayed due to Harland’s financial issues.

[Chris from Nailsea]

Atlantic Wolff has ceased trading (before it started).

Should I now amend this topic heading again, to include '... not happening' ? 

From the BBC^» (British Broadcasting Corporation - home page): see https://www.bbc.co.uk/news/articles/ck5gkxg700jo 

[Chris from Nailsea]

From the BBC^» (British Broadcasting Corporation - home page):

Titanic shipyard to go into administration

Shipbuilding company Harland and Wolff has confirmed the business is to be placed into administration for the second time in five years.

Insolvency practitioners Teneo are being lined up to act as administrators and some "non-core" staff are being made redundant.

However, the company’s board said there was a "credible pathway" for its four shipyards to continue trading under new ownership.

Its main yard is in Belfast, best known for building the Titanic, with other operations at Appledore in England and Methil and Arnish in Scotland.

The company said the administration process would be confined to the holding company, Harland & Wolff Group Holdings plc, and the operational companies which run the yards are expected to continue trading.

However, shareholders will see the value of their investments in the business entirely wiped out.

The firm said its non-core operations are being wound down.

That process had already started with the closure of its Scilly Isles ferry service before sailing had even begun.

(... news article continues ...)

[GBM]

From the BBC^» (British Broadcasting Corporation - home page):

Titanic shipyard to go into administration

Shipbuilding company Harland and Wolff has confirmed the business is to be placed into administration for the second time in five years.

Insolvency practitioners Teneo are being lined up to act as administrators and some "non-core" staff are being made redundant.

However, the company’s board said there was a "credible pathway" for its four shipyards to continue trading under new ownership.

Its main yard is in Belfast, best known for building the Titanic, with other operations at Appledore in England and Methil and Arnish in Scotland.

The company said the administration process would be confined to the holding company, Harland & Wolff Group Holdings plc, and the operational companies which run the yards are expected to continue trading.

However, shareholders will see the value of their investments in the business entirely wiped out.

The firm said its non-core operations are being wound down.

That process had already started with the closure of its Scilly Isles ferry service before sailing had even begun.

(... news article continues ...)

Not able to click through from the link
Maybe this will work
https://www.bbc.co.uk/news/articles/crkddrv7v2po

[Chris from Nailsea]

Thanks, GBM - I made a right pig's breakfast of that hyperlink - now corrected. 

[GBM]

Oddly, the H&W freight services are still running on the Scillies services.

[CyclingSid]

MoD has just ordered new supply ships from H&W https://www.forcesnews.com/services/navy/fleet-solid-support-ships-contract-royal-navy-will-go-ahead-troubled-belfast-shipyard

[stuving]

MoD has just ordered new supply ships from H&W https://www.forcesnews.com/services/navy/fleet-solid-support-ships-contract-royal-navy-will-go-ahead-troubled-belfast-shipyard

This order was in fact placed in January last year, with the Resolute consortium including H&W. Most reporters and headline writers have struggled to make the distinction between the shipyards businesses (trading and solvent) and the group holding company (being wound up as insolvent). Even Hilary' Benn's statement doesn't manage to, perhaps because both companies are just called Harland and Wolff.

[Chris from Nailsea]

An update, from the BBC^» (British Broadcasting Corporation - home page):

Titanic shipbuilder formally enters administration

Harland and Wolff, the Belfast-based shipbuilder which built the Titanic, has formally entered administration for the second time in five years.

Last week the company’s board had warned that the move was inevitable.

The administration process is confined to the holding company, Harland & Wolff Group Holdings plc, with the operational companies which run the yards continuing to trade.

Its main yard is in Belfast with other operation at Appledore in England and Methil and Arnish in Scotland.

The company’s executive chairman, Russell Downs, is optimistic that a new owner or owners will be found for the yards.

Gavin Park and Matt Cowlishaw of Teneo Financial Advisory have been appointed as joint administrators.

The holding company currently has 59 employees.

In a statement Harland and Wolff said: "The Administrators will unfortunately be required to reduce the headcount upon appointment.  A number of employees will be retained to provide certain required services to the operational companies under a transitional services agreement with the Administrators."

The company has also restated that the administration process means that shareholders in Harland and Wolff will see the value of their investment wiped out.

Famous for building the Titanic, the Belfast shipyard was founded in 1861 by Yorkshireman Edward Harland and his German business partner, Gustav Wolff.  By the early 20th Century, Harland and Wolff dominated global shipbuilding and had become the most prolific builder of ocean liners in the world.

Harland and Wolff was bought out of administration in 2019.  Its then Norwegian owners had withdrawn support and the business fell into insolvency, having not built a ship in a generation.

The new owner, Infrastrata, was a small London-based energy firm which did not have significant experience in marine engineering.  Infrastrata later changed its name to Harland and Wolff and in 2022 won a major Royal Navy contract as part of a consortium led by Navantia, Spain’s state-owned shipbuilder.

However financial losses mounted as it scaled up its operations.  The 2021 accounts, which covered a 17-month period, showed a loss of more than £25m.  The audited annual accounts for 2022 showed turnover of £28m and a loss of about £70m with the auditor’s opinion of "material uncertainty" about the firm’s ability to continue as a going concern.  Unaudited accounts for 2023 saw a loss of £43m.

The company was increasingly reliant on high-interest borrowings from a specialist US lender, Riverstone.  It was also pinning its hopes on getting government loan guarantee that would allow refinancing with more conventional lenders.

In July the new government confirmed there would be no support as there was "a very substantial risk that taxpayer money would be lost".

Russell Downs, a restructuring expert, was parachuted in to act as executive chairman and began a strategic review of the business along with advisors from Rothschild bank.

[ChrisB]

From Business Live, via MSN

Harland & Wolff's failed Scilly Ferries venture left £3m in debt before collapse

Harland & Wolff's ill-fated venture into the ferry service sector, Scilly Ferries, amassed debts of £3m before succumbing to administration earlier this year, according to recent disclosures in official filings.

In a bold move by the former management of the shipyard renowned for building the Titanic, Scilly Ferries was established despite setbacks including financial turmoil and a delayed launch, ultimately ceasing operations without completing a single trip, as reported by City AM.

The ambition shown by Harland surprised industry observers since the company ventured into an unfamiliar ferry operating domain and had previously been unsuccessful in obtaining the contract to revamp the ageing Scillonian III service connecting the Scilly Isles with the mainland.

Newly released documents at Companies House have now confirmed that Scilly Ferries was significantly indebted to creditors totalling more than £3m at the point of its collapse. This comes on top of earlier reports exposing that the parent company, Harland & Wolff, owed a staggering sum exceeding £160m as it entered administration.

Back in May, amid postponements to Scilly Ferries highly anticipated summer inauguration, Harland & Wolff arranged for a helicopter service to mitigate inconvenience for customers left stranded by the delay, as City AM reports have indicated.

Detailed in the records is the revelation that Starspeed Limited, holding a five-year contract from 2022 to conduct air transportation between Penzance heliport and the Scilly Isles, had an outstanding claim of £71,016 against Harland at the time of its financial demise.

During that turbulent period, John Wood, the then-chief executive at Harland, disclosed in May that discussions were in progress with various local operators to forge "secure alternative arrangements" catering to those who had bookings with Scilly Ferries.

Passengers took to social media to voice their frustrations about last-minute changes and lacklustre communication regarding their planned long-distance travels, while some expressed excitement at the unexpected opportunity of a helicopter ride.

Starspeed has remained silent, not providing any comments when approached.

The lavish spending has sparked further scrutiny over financial decisions leading up to Harland's second fall into administration within five years.

When City AM reached out for a statement, Wood implied that inquiries should be "better directed at the directors that took over the business."

He referenced his records, noting that the choice to halt [alternative] operations likely resulted in a loss of at least £6m in revenue for the initial season, discussing the ferry service.

Wood claimed that the venture was projected to reach break-even in its inaugural year and that helicopter flights were factored into the budget due to anticipated repeat business from Starspeed during the summer months, "when helicopters couldn't fly due to fog."

Amidst the turmoil and under new leadership, the company initiated an internal investigation into the mismanagement of over £25m by its previous executives, which appeared to have provided "little or no financial or corporate benefit."

According to reports from Irish News, other creditors include the Labour party and the Labour-affiliated think tank, Progressive Britain, with debts of £18,000 and £12,000 respectively.

Over two months since entering administration, Harland & Wolff now appears to be on the brink of a rescue deal with Spanish state-owned shipbuilder Navantia, a move that could potentially safeguard around 1,000 jobs.

Harland & Wolff did not respond to a request for comment.

btw - if you are merging ferries, why not buses (or trains)

[Chris from Nailsea]

ChrisB:

I try to merge topics where they are specific to one particular location, or service - in the interests of clarity / continuity.

Indeed, I'm looking at this whole 'Scilly' subject, as it's been the subject of many posts, in several different topics.

Surely it would be helpful for our readers to be able to access all of that information in just one definitive topic?

CfN. 

[grahame]

https://www.bbc.co.uk/news/articles/c6273nqdpvpo

Ferry route is UK^▸ (United Kingdom)'s best for wildlife spotting

[Chris from Nailsea]

From the BBC^» (British Broadcasting Corporation - home page):

Harland & Wolff saved by deal with Spanish firm



Harland & Wolff, the Belfast shipyard best known for the Titanic, has been saved by a deal with Spain's state-owned shipbuilder.

Navantia had been in exclusive negotiations since October after Harland & Wolff's holding company fell into administration.  About 1,000 jobs are to be saved in the deal, which also includes Harland & Wolff's facilities in Scotland and England.

The UK^▸ (United Kingdom) Business Secretary Jonathan Reynolds said the deal was "good for jobs" and "good for national security".  Reynolds said that the deal secures all four Harland & Wolff yards across the UK and guarantees jobs for "years not months in all four of those yards".  He added that the deal was "a major vote of confidence in the UK from Navantia".

Asked whether the government had sweetened the deal for Navantia by changing the terms of a contract to deliver three Royal Navy support ships, Reynolds said there had been a "minor revision" to the contract to include "more support" from the government.

The agreement is to be presented as early fruits of the government's post Brexit "reset".

Gavin Robinson, the leader of the Democratic Unionist Party (DUP), said he was "delighted that this agreement has been reached which will secure the future of jobs in Belfast and in its other sites".  The MP^▸ (Member of Parliament) for East Belfast said that uncertainty over the future of the business had been "hugely unsettling... particularly for all the staff at the yard".  Robinson added that Harland & Wolff "forms part of a wider defence sector that has huge potential for further growth in Northern Ireland".

Navantia, which is 100% owned by Spain's government, has been a significant recipient of funding from the European Commission as part of the European Defence Fund.  Joining the fund is a possible objective for the UK-EU^» (European Union - about) security reset, set to be discussed at a summit early in the new year.

The Spanish economy minister responsible for its state-owned businesses, Carlos Cuerpo, met with Chancellor Rachel Reeves and Business Secretary Jonathan Reynolds in London last month.

Navantia already has a business relationship with Harland & Wolff. It is the main contractor on a project to build three support ships for the Royal Navy, with Harland & Wolff acting as UK subcontractor.

The company employs a core staff of about 1,000 in Belfast, Appledore in England and Methil and Arnish in Scotland.

Navantia's main shipyard is at Cadiz in southern Spain.  It employs more than 4,000 people and has an annual turnover of about €1.3bn (£835m).

[ChrisB]

I'm unsure that they are picking up the car ferry though