Rescue package agreed for Swan Hunter shipyard

Click to follow
The Independent Online
SWAN HUNTER, the historic Tyneside shipbuilder, is on the brink of being saved by a rescue package awaiting approval from the Ministry of Defence, writes Russell Hotten.

The yard's receiver has negotiated a sale to the French group Soffia-CMN, but the deal needs to clear 'a couple of legal technicalities' at the MoD. News of a sale will come as a relief to the remaining 630 workers whose hopes have been raised several times since Swan Hunter went into receivership last year. Soffia has in effect agreed to finance the running of the yard for about a year while it seeks new MoD contracts, many of which are up for tender next year.

The yard, which employed 2,200 at the time it went into receivership, was to close in November when existing refit work on HMS Richmond runs out. Soffia, the only company interested in buying Swan Hunter, has been in on-off talks with the receiver for weeks and most workers had given up hope of survival.

Last week the receiver, who is duty bound to get the best deal for creditors, said Soffia's offer was inadequate and he could get more money selling off the assets. Soffia's revised terms would mean the company financing the cost of future tenders, at about pounds 1m a time. It will also spend pounds 1m this year on wages to Swan Hunter's design team, a crucial element in tendering for contracts. Other wages will be paid by the receiver, though a deal has been reached with the unions that workers can be laid off without pay, but with the promise they will be the first back to work if new orders are won.

Soffia will buy the HMS Richmond contract for between pounds 2m and pounds 3m, and then sub- contract the work back to the receiver. The receiver will retain the yard's assets until Soffia builds a solid book of about two years' work. The French would then buy the assets for between pounds 2m and pounds 5m. The transfer of the HMS Richmond contract to Soffia needs MoD approval. One source said: 'There are a couple of legal technicalities that the MoD's lawyers have to settle. It's not a serious hurdle but these things take time.'

Several MoD contracts are up for tender next year, including a number for frigates and landing craft. Any one of these would provide about two years' work.

(Photograph omitted)

Comments