EC authorizes rescue loan for German shipbuilder P+S Werften

JULY 11, 2012 — The European Commission has authorized under EU state aid rules, a state guarantee backing a rescue loan of €152.4 million for the German shipbuilder P+S Werften in Mecklenburg-Vorpommern. The aid is in line with EU rules on rescue aid because it is limited in time and scope. The Commission approved the measure temporarily, until it can take a position on the restructuring plan to be submitted by Germany within maximum six months.

P+S Werften GmbH was created in 2010 through the merger of the two long-established German shipbuilding companies Volkswerft Stralsund GmbH (seen in photograph) and Peene Werft GmbH. It operates two shipyards in Mecklenburg-Vorpommern and employs approximately 1,800 employees. It has been facing financial difficulties for several months, due to financial burdens stemming from past developments and the specific liquidity constraints of shipbuilding.

The Commission authorized a short-term measure to tackle liquidity problems and enable P+S Werften to pay creditors and properly maintain production pending the implementation of a restructuring plan.

The Commission found the measure to be in line with its guidelines on the rescue and restructuring of companies in difficulties. In particular, the aid amount is limited to what is needed to keep the company in business over the next six months. Moreover, the German authorities have committed to submit in maximum six months a restructuring plan capable of ensuring the future viability of P+S Werften.

As of June, P+S Werften had an orderbook  worth more than one billion euros and said it was negotiating projects worth a further €2.4 billion. Its orderbook included two ferries for Scandlines, two offshore installation vessels, a heavy lift offshore construction vessel, two special transport vessels for DFDS, five ice-breaking special cargo vessels for  Royal Arctic Line as well as four coast guard vessels for the Swedish Coast Guard.