Harland & Wolff’s future looks uncertain after it was turned down for a £200m loan guarantee from the UK government.
The company is now trying to recapitalise and has sought advice on its “strategic options”.
The shipyard company, based in Belfast, had sought an Export Development Guarantee to enable it to fulfil part of a £1.6bn Royal Navy contract.
But in a statement on Friday, Harland & Wolff confirmed its application had been refused by the Department for Business and Trade and it was now expediting discussions with its existing lender for an emergency loan.
The department declined to comment but it’s understood their officials have been in close contact with H&W and its backers.
It’s believed to have confidence that a solution can be found that removes the risk of administration.
A person close to the situation said jobs at the company and its four shipyards around the UK were a major concern.
But the government is insisting it remains committed to shipbuilding around the UK. It is said to be monitoring the situation very closely.
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The Business Secretary is expected to update parliament on Monday.
The company said it had expedited discussions with Riverstone Credit Management in New York “in order to secure alternative new debt facilities to support the near-term working capital needs of the business following its recent significant revenue growth”.
“These alternative financing arrangements are expected to close within the next few days.”
It confirmed it was talking to stakeholders including the UK government around existing and future contracts and around long-term capitalisation plans.
It has also engaged Rothschild & Co to assess “strategic options” for the group.
It has around 1,500 employees around the UK, including an estimated 500 in Belfast.
And it confirmed the departure of chief executive John Wood for a “leave of absence… with immediate effect”.
Russell Downs is now proposed to join the board as interim executive chairman.
The company said the financial professional has had “notable successes returning significant value to stakeholders and securing complex refinancings”.
It said he would be well-placed to lead the board “as it seeks to complete a recapitalisation intended to give the company a sustainable financial footing into the medium and long term”.
Mr Downs said: “I am very pleased to take on this role after a challenging period for the group as it transitions from one leadership team to another and deals with the increasing speculation over its future.
“The great weight of responsibility for all stakeholders involved in the business to secure a long-term future is crystal clear to me and I am enormously honoured to be given the responsibility to find a solution.
“I will be working tirelessly in consultation with employees, management, customers, suppliers, unions, government agencies and other stakeholder groups in the coming weeks.”
Trading in shares in the company on the AIM has been suspended since July 1 as auditors had refused to sign off its accounts.
Earlier this week, Economy Minister Conor Murphy said he’d written to Secretary of State Hilary Benn to express support for workers at Harland & Wolff as it awaited the government’s decision on the guarantee.
“Invest NI is in contact with the company and monitoring developments,” Mr Murphy added.
Uncertainty is also hanging over the future of Spirit AeroSystems factory in east Belfast.
The US aerospace giant is being sold to Boeing, with Airbus entering an agreement to acquire part of the Belfast site where wings are manufactured for its A220 plane.
Last week Belfast Telegraph revealed that Bombardier, which used to own the operation, has a “strong interest” in reacquiring the parts of it which aren’t being taken over by Airbus.