Thursday, September 14, 2000

Belfast yard to restructure following arbitration award

Harland and Wolff says it welcomes an arbitration panel ruling that holds that over US$31million is presently due from Global Marine and payable by September 28, 2000.

"Receipt of these monies," says a company statement, "will enable a restructuring of the company to take place with the support of the parent company, Fred. Olsen Energy ASA. The restructuring will provide an opportunity to establish a profitable, viable and sustainable offshore and shipbuilding industry in Belfast, although, as previously advised, this will necessitate a significant reduction in the number of employees."

Harland & Wolff will complete a business plan demonstrating the viability of continuing shipbuilding and engineering at its Queens Island location along with the development of Titanic Quarter under the terms of an agreement with the Belfast Harbour Commissioners. The company says formalization of that agreement is "a necessary part of the restructuring to provide Harland and Wolff with the basis to continue shipbuilding."

The company is starting consultations with unions before making a final final determination on numbers of jobs to be shed in the reaorganization and the timing of job losses. It has already applied to the Department of Higher and Further Education, Training and Employment for Northern Ireland for a loan to assist with the resultant redundancy costs.

Commenting on the ruling of the arbitration tribunal, Brynjulv Mugaas, H&W Chief Executive said: "Since first tendering the Glomar Jack Ryan for delivery on 24 July, we have maintained that the yard's scope was complete in accordance with the contract and have been confident of a positive outcome to this arbitration. "

"A direct consequence of the financial condition in which Global Marine has placed us, " said Mugaas, "has been the difficulty in securing major newbuilding orders in the timeframe we would have anticipated. The positive outcome from the arbitration should reduce the uncertainties and restore market confidence in Harland and Wolff, thereby assisting us to bring potential major orders to fruition. We shall continue to strenuously pursue efforts to win short and long term contracts."

"An indication of its further support for the yard and shipbuilding in Belfast," said Mugaas, "is Fred. Olsen Energys intention to bring another Aker H3 Drilling Rig, Bulford Dolphin, to the yard for classification work. Bulford Dolphin will be the fourth Fred. Olsen Energy rig to come to the Belfast yard."


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