Group needs €2.7bn to manufacture vessels whose prices were negotiated when costs were lower
(Bloomberg) — The German government is working on a potential lifeline for struggling shipbuilder Meyer Werft GmbH, the privately-held company that just days ago won a follow-on contract to supply vessels for Disney Cruise Line’s fleet.
industrial crown jewel
Chancellor Olaf Scholz on Thursday pledged to help rescue the “industrial crown jewel” at a meeting of the company’s works council in the north-western town of Papenburg.
“It’s clear we all want to secure the continued existence of the shipyard and everything that depends on it,” Chancellor Olaf Scholz said during a visit to the company near the northern port city of Bremen on Thursday.
The worst crisis
The group is experiencing the worst crisis in its 229-year history. With many of its contracts negotiated before the Covid-19 pandemic and not adjusted since then to take higher raw materials and energy costs into account, it needs €2.7bn to finance construction of the ships on its order book.
Creditworthiness
The storied Papenburg-based shipyard, owned in the seventh generation by the Meyer family, employs about 3,300 people. It ran into trouble during the Covid-19 pandemic and banks started to question its creditworthiness. A large chunk of the purchase price for cruise ships is only paid when vessels are handed over to customers, making interim financing essential.
Declined to comment
Federal and state governments would contribute €400 million in equity, backstop bank loans and take a temporary stake of at least 80%, the reports said.
Economy Minister Robert Habeck declined to comment on the specifics of the planned rescue deal, telling reporters earlier Thursday that “solutions are possible and within reach.”
New contract
Meyer Werft on Aug. 12 announced a new contract to build four more ships for the Disney Cruise Line on top of the four already in its order book.
Largest modern shipyards
MEYER WERFT is one of the largest and most modern shipyards in the world. The company’s roots can be traced back to the year 1795, when Willm Rolf Meyer founded the shipyard in Papenburg. Our family business is now in its seventh generation.
The other shipyards in the MEYER Group are NEPTUN WERFT in Rostock and MEYER TURKU in Finland. We design and build cruise ships, river cruise ships and ferries – tailored to the needs of our clients and with a wealth of expertise and innovative solutions.
Sources : German Media
