The company had applied for a £200m (€237m) loan guarantee from the government as part of efforts to restructure its finances.
In a written statement to parliament, business secretary Jonathan Reynolds explained why the government had rejected the request to act as a guarantor on fresh lending, and would not offer direct funding to help maintain the company’s liquidity. “This decision was based on a comprehensive assessment of the company’s financial profile and the criteria set out in our risk policies,” he said.
“We have also decided not to provide any form of emergency liquidity funding. While such a decision is not easy, it is my assessment, following extensive engagement by my officials with market players, that government funding would not necessarily secure our objectives and there is a very substantial risk that taxpayer money would be lost.
“The government believes, in this instance, that the market is best placed to resolve the commercial matters faced by Harland & Wolff.”
The company, which built the Titanic, has four sites – one in Belfast, two in Scotland and one in England.
In a statement on Friday confirming the government loan guarantee had been rejected, the company said it would seek alternative new debt facilities from a current lender, Riverstone Credit Management. It said it was engaging an investment bank – Rothschild & Co – to assess “strategic options”.
It also announced chief executive John Wood was taking a leave of absence with immediate effect. It said Russell Downs, an industry expert in refinancing and recapitalisation, would take on the role of interim executive chairman.
Commenting on its move to seek further financing from Riverstone, Mr Reynolds said: “This should allow the business to continue pursuing its short and longer-term objectives, in which the government continues to take an interest.
“In all our engagements with them, Riverstone has recognised the importance of the assets at Harland & Wolff as well as the people who work there, showing a desire to find pragmatic solutions that support (our) objectives.”
The business secretary said he was working with colleagues across government and the devolved administrations to secure a “positive outcome”.
