Harland and Wolff has said its application for a multimillion-pound loan guarantee from the Government has been rejected.
Amid uncertainty around the Belfast shipbuilder’s future, it also announced that chief executive John Wood was taking a leave of absence with immediate effect.
The company, which is part of a consortium that landed a major contract to build new Royal Navy ships, had applied for a £200 million loan guarantee from the Government as part of efforts to restructure its finances.
Harland and Wolff said it will seek alternative new debt facilities from current lender Riverstone Credit Management.
The company said it was also engaging an investment bank – Rothschild & Co – to assess “strategic options”.
Business Secretary Jonathan Reynolds is expected to make a statement on Harland and Wolff to Parliament on Monday.
It is understood officials from the Department for Business and Trade have been in close contact with the company and its lenders and are confident a solution will be found to remove the immediate risk of administration.
With Mr Wood taking a leave of absence, Harland and Wolff said Russell Downs, an industry expert in refinancing and recapitalisation, will take on the role of interim executive chairman.
He 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.
Jonathan Reynolds will make a statement on Monday (Lucy North/PA)
“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.”
DUP leader and East Belfast MP Gavin Robinson said: “There has been a period of uncertainty for workers in recent weeks.
“I have been engaging extensively with the Government, including discussions yesterday. The Government’s commitment to a renaissance to shipbuilding in our city remains.
“The contract for Fleet Solid Support Ships is a significant boon for Belfast and should instil confidence that with the right management, our shipyard is an attractive proposition with better days ahead.
“Having engaged with union representatives yesterday afternoon, I will continue to champion the yard, its workforce and its future.
“With Parliament sitting next week, there will be an important opportunity for the Government to reiterate its support for shipbuilding in Belfast.”