Swan Hunter bid judged inadequate

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THE chances of saving Swan Hunter shipbuilder faded yesterday after receivers said a revised bid to buy the yard, from the French group Soffia, was inadequate, writes Russell Hotten.

Ed James, joint receiver from Price Waterhouse, asked for urgent talks with Soffia's head, Iskandar Safa, and a meeting was expected today.

Mr James said a gulf had appeared, which he hoped could be bridged. 'The outline proposals from Soffia will need to be significantly improved if there is to be any chance of agreement.'

Soffia has asked for the yard to be kept open by the receiver while it bids for shipbuilding contracts from the Ministry of Defence. It has promised to buy Swan Hunter and retain the existing workforce of 630 and re-employ 200 more if a two- year order book can be built up.

The situation is further complicated because the MoD has promised Swan Hunter a pounds 6m contract to refit the vessel Olwen - but only if the yard is bought out of receivership.

The receiver, working for Lloyds Bank, the main creditor, wants to resolve the matter before 1 August, when it plans to wind down the yard before work runs out in November. That would mean disbanding the yard's design team, a crucial element in putting together tenders.