Perspective for Shipbuilders - Time frame for saving Meyer Werft
The leadership of the Meyer Werft, which is fighting for its existence, sees prospects for the company in light of a report. However, there are still many tasks to be completed, according to Werftchef Bernd Eikens and sanitation expert Ralf Schmitz in Papenburg.
Deloitte's consulting firm reportedly presented a positive outlook for the company's sanitation in a preliminary draft. The final version should be available by the end of August at the latest - until then, many things need to be put in place, emphasized Schmitz.
Meyer Werft must urgently improve its results
The Werft must urgently improve its results. The Werft reported losses recently, said Schmitz to the German Press Agency dpa. The company needs fresh money by September 15th. "We need a commitment and corresponding credit agreements - that's still a lot of paperwork", said Schmitz.
Approximately 2.5 billion Euros are needed for shipbuilding. This is not about subsidies, but about usual credits to make investments. In the shipbuilding industry, 80% of the shipbuilding price is usually only paid upon delivery - the Werft must therefore finance the construction with credits.
Public sector involvement possible
The financing for increasing the equity capital is more difficult because it involves financing past losses, said Schmitz. The "most likely scenario" is a public sector involvement in the Werft. In parallel, the Werft management is also looking for a third party who could participate in the company. The equity capital needs to be increased by 400 million Euros.
There are currently talks with banks, as well as with the federal and state governments, said Schmitz. Results are not yet available. If the federal and state governments provide guarantees for 80% of the required 2.5 billion Euros, there will be 500 million Euros left for which there will be no guarantees from the public sector.
Caution from banks
There is now a general reluctance among German banks to invest in the shipping sector, said Schmitz. One reason is the crisis in the container shipping industry a few years ago. "Additionally, Meyer Werft was not a profit machine in the past years." The losses of the company were mainly due to the Corona pandemic.
Given the difficult environment, it is difficult to obtain financing for a company that has not generated significant profits or even incurred losses in recent years, said Schmitz.
The workforce is more optimistic about the prospects
The report was received with relief by the workforce, said Works Council Chairman Andreas Hensen. He himself is not yet familiar with the complete report. The works council intends to deal with it in the coming days. It is clear that the Werft is not yet finally saved, said he.
Strengths of Meyer Werft
The report reportedly also mentions the strengths of Meyer Werft. Among them are their innovative strength, an entrepreneurial and engaged new management, as well as many highly experienced employees.
The transformation of the company is expected to take three to four years, it was said. By 2028, the Meyer Werft should again be a "reliable, quality-conscious yard" that can maintain its technology and innovation leadership, especially in the areas of sustainability and digitalization, with its customers and partners.
Greatest crisis since the founding of the Werft
The yard known for its cruise ships is facing the worst crisis in its over 200-year existence. The yard currently has orders up to 2028. However, some contracts for the cruise ships were signed before the Corona pandemic.
Due to the temporary decline in the tourism market, the orders were adjusted in consultation with the shipping companies. However, they see no adjustment to the drastically increased energy and raw material prices due to Russia's attack on Ukraine.
At the beginning of July, the management reached an agreement with the works council and IG Metall on a restructuring concept. Approximately 340 of the more than 3,000 positions are therefore to be eliminated. A supervisory board and a corporate works council are to be established, and the company headquarters are to be relocated from Luxembourg back to Germany.
- Deloitte's consultation report suggests a positive outlook for Meyer Werft's future, but much work still needs to be done according to Bernd Eikens and Ralf Schmitz.
- The final version of Deloitte's report will be available by the end of August, and Schmitz emphasizes the need for urgent action to implement its recommendations.
- Meyer Werft has reported significant losses recently and needs to improve its results, with a commitment and corresponding credit agreements required by September 15th.
- Schmitz mentions that approximately 2.5 billion Euros are needed for shipbuilding, not as subsidies but for typical credits to finance investments.
- Public sector involvement in the Werft's equity capital increase is considered the most likely scenario, as financing past losses is proving difficult.
- In addition to public sector involvement, Meyer Werft is actively seeking a third-party investor to participate in the company and increase its equity capital by 400 million Euros.
- Banks are generally reluctant to invest in the shipping sector due to the crisis in the container shipping industry and Meyer Werft's past financial performance.
- The Works Council Chairman, Andreas Hensen, expresses optimism about the report's prospects but acknowledges that the Werft is not yet saved and more work needs to be done.
