Aker Philly in credit crunch

Aker Philadelphia Shipyard is trying to get a $150 million loan to build the two tankers for which it has already ordered materials but for which, as yet, it has only options.

"In a normal economy, Aker would borrow from a bank," reports the Philadelphia Inquirer, "but with credit impossible to get, Aker is seeking a $150 million 'bridge loan' from the Maritime Administration of the U.S. Department of Transportation."

The newspaper reports that the shipbuilder appealed last week to Philadelphia port officials and to state and federal lawmakers to help with what it called "an immediate and serious challenge" that could result in layoffs of 1,200 workers beginning in March.

According to the newspaper, Aker will put up $40 million of its own money, or just over 20 percent of the total $190 million cost, to build the two tankers, but "still needs an additional $15 million in federal maritime funds to secure the $150 million loan."

The newspaper reports that Pennsylvania Gov. Rendell wrote Vice President Biden last Thursday saying that without short-term credit help, the yard "is in danger of beginning the systematic closure of its operation in March 2010."

If funds are not committed by the end of October, Rendell reportedly wrote, Aker will initiate layoffs in March, terminate vendor and supplier contracts, and cease operations in March 2011.

"It is unlikely the shipyard will ever reopen once the workforce is lost, production ceases, and financial losses accumulate," Rendell wrote.

READ THE INQUIRER STORY HERE