Suppliers to Harland & Wolff risk losing money as the group company and its shipyards enter administration as part of the sale of the famous shipbuilder, it has emerged.
Navantia, a shipbuilding firm owned by the Spanish government, has agreed to buy all four of the shipyards currently owned by Harland & Wolff, in Belfast, Scotland and Devon.
The jobs associated with the yards, and the major contract with the Ministry of Defence to build Fleet Solid Support (FSS) ships, will be carried over in the sale.
However it has emerged that the group company, and the four shipyards it owns, will still enter administration as part of the sale.
According to the BBC, legal notices of intention to appoint administrators to the four yards were published this week.
This is not expected to affect any of the 1,000 jobs in shipbuilding associated with the yards, however it does mean that suppliers owed money may miss out on “significant” sums of money that are owed to them.
Harland & Wolff is part of the winning consortium on a contract from the Ministry of Defence for the FSS ships.
The Belfast Telegraph has spoken to a senior member of one company owed money for supplying Harland and Wolff.
They expressed shock that detail of the shipyards’ administration was not mentioned in the government’s press release announcing the sale on December 19.
They further explained how the loss of the money could have serious implications for their business.
The move is not expected to put their company out of business, but could still deliver a significant blow to their profits.
Gavin Robinson, DUP MP for East Belfast and party leader, said news about the administration was “deeply concerning.”
“While I expect the jobs in east Belfast and the new contracts will be safeguarded under the ownership of the Navantia UK, the sudden financial uncertainty will leave many businesses in the Harland & Wolff supply chain in a precarious position.
“This will be a hammer-blow to those companies with some owed significant sums.
“I urge all involved parties, including the new owners and relevant authorities, to engage urgently and find ways to mitigate the impact on our local supply chain.
“Supporting these businesses is critical to maintaining their viability and the completion of the contract.”
The Department for Business and Trade said Secretary of State for Northern Ireland Hilary Benn had set out the government’s position on this matter on Wednesday.
Asked a question about the process by Mr Robinson in the House of Commons on Wednesday, Mr Benn said the sale to Navantia had been “very good news”,
“Ultimately the question of how to relate to those suppliers is a commercial matter for Navantia, but I am sure that it wants to build a good relationship with firms that will help Harland & Wolff to build the three fleet solid support ships.”
Navantia has been approached for comment.