UK government swithering is putting offshore and maritime engineering firm Harland & Wolff at risk, say reports.
It is understood that chancellor Jeremy Hunt is set to block a financial support package to the firm with yards in Belfast, Methil, Arnish, and Appledore.
This has prompted some to suggest that Harland & Wolff may collapse as a result.
However, Harland & Wolff (AIM: HARL) has said that this is “not accurate” when questioned on the situation.
Speaking on an article in The Times that reported this, John Wood, group chief executive for Harland & Wolff commented: “We were disappointed to read this article and the reaction it has caused, given that we have grown the business to become a major player in the UK shipbuilding sector, whilst spreading our risk over multiple markets.”
He said an Export Development Guarantee funding package was still a “work in progress”.
“Our EDG application has not been rejected and continues to be work in progress. I expect to be providing a fuller update on our refinancing plans in the next few weeks”.
The government was set to make good on a £1.6 billion contract to construct Royal Navy ships before Hunt’s speculated U-turn.
Matt Roberts, national officer for trade union GMB blamed “inter-departmental warfare” in the UK government for the furore.
He said: “Instead of inter-departmental warfare in the Tory government spilling out and scaring workers, we need unequivocal joined-up support for our shipbuilding industry.
“All the promise of UK workshare on the FSS order must be maintained in full and ideally increased.
“We will not stand by and accept any move to send further work out of the UK on this order.”
If this contract were to fall through the navy vessels would be built in the Spanish port of Cadiz, marking the first time a British warship would be built overseas.
Harland & Wolf says all staff are ‘engaged on active projects’
A £200 million support package from the public purse was given the green light late last year to support the firm that has been struggling financially.
The firm has said it is performing well in a company update addressing this controversy.
Harland & Wolff wrote: “The company’s five-year plan was to reach forecasted revenues of £200m by the close of FY24, of which circa 90% has already been contracted.
“The business currently employs in excess of 1,500 people who are all engaged on active projects.
“The next goal for the company is to increase contracted revenues for FY25 and beyond as well as to achieve the milestone of annualised EBITDA break-even in FY24. ”
However, it is being rumoured that Mr Hunt has signed off on rejecting the company’s application a UKEF Export Development Guarantee.
A Harland & Wolff spokesperson said the application has “not been rejected and the process is ongoing”.
The spokesperson added: “We will not comment further on inaccurate speculation.”
A Government spokesperson said: “We continue to engage with Harland & Wolff on the export development guarantee.
“Due to commercial sensitivities, it would not be appropriate to comment further until the outcome of the process is confirmed.”
The government has also reiterated that the chancellor has not yet made a decision on this.
Harland & Wolff sets out plans for headcount growth
Earlier this year Harland & Wolff said it expects to create at least 200 new jobs at Arnish, on Lewis, and 400 in Fife through a £270 million investment in its Scottish shipyards.
The company aims to transform its facility at Arnish, near Stornoway, and another in Methil, Fife, into major hubs for renewable energy.
New opportunities at both locations would include those created by an apprenticeship and graduate programme for about 30 people, it added.
The firm previously said it aims to “work closely with local suppliers and educational institutions to ensure the benefits of any investment are felt throughout the Methil and Arnish communities”.
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