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Thursday, 12 April, 2001, 11:36 GMT 12:36 UK
Cammell Laird seeks rescuer
Receivers appointed to shipbuilder Cammell Laird say they plan to keep the company operational until a buyer is found.
The UK shipbuilder went into receivership on Wednesday with debts of £125m. Hundreds of dockyard jobs will be lost unless it can be sold as a going concern.
The Department of Trade and Industry says it will work with receivers PricewaterhouseCoopers (PwC), to try and secure a deal.
Receivers move in
The PwC statement says they plan to keep the yard operational.
"We will continue to trade the company while seeking a going concern sale. We are encouraged by the information we have from the company so far and actively looking to maximise assets and secure the future for Cammell Laird. Business continues as usual on Merseyside and Tyneside," Edward Klempka, one of the PwC receivers, was quoted in the statement.
It did not say whether there would be any job losses or whether a deadline had been set for a sale to be agreed.
Some UK subsidiaries and overseas operations of Cammell will be excluded from the receivership including those in the US, Gibraltar, and Marseille in France
The receivers are currently examining Cammell Laird's accounts and are expected to make further statements soon.
PwC helped revive the fortunes of the now Dutch-owned Swan Hunter shipyards in 1994 when it had financial difficulties.
Cammell Laird, which owes about £125m, blames its troubles on a failed contract to build an Italian cruise ship for £50m as well as missing out on part of a £1bn Ministry of Defence order.
Cammell Laird's fate was reportedly sealed by the Royal Bank of Scotland who declined to extend overdraft and payment facilities on a £50m loan.
The company has already laid-off 450 workers because of the failed Italian contract.
The ship yard's troubles come as a further embarrassment to the UK government which is already grappling with 1,500 job losses at Marconi and another 3,200 at Motorola's plant in Scotland.
"We are also certain that the Government will provide Cammell Laird with the same level of financial and political support that we have seen extended to the farming community over recent weeks," said John Edmonds, general secretary of the GMB union.
Hopes are high among unions and workers that the yard can continue to operate.
"Obviously the workforce will be very concerned by this announcement, but we are confident that shipbuilding at Cammell Laird remains a viable operation," said Mr Edmonds.
The current Cammell Laird company grew out of Coastline group which initially rented part of the derelict Cammell Laird dockyard.
In the mid-1990s it changed its name to Cammell Laird, growing from a small operation to employing hundreds as it built a lucrative and profitable trade repairing and refitting vessels.
In autumn 2000 the group recorded a record level of enquiries, totalling approximately £750m, but it failed to convert these into orders, with two major government contracts going to other yards.
Cammell Laird's shares were suspended on Wednesday morning at their Tuesday closing price of 6p, valuing the company at £17.3m.
The ship's operator, Costa Crociere, pulled the plug on the order to lengthen the vessel as the ship was sailing to Cammell Laird's yard.
The Merseyside based firm had been due to split the ship in two and insert a new centre portion before fixing all three bits back together to create the longer ship.
The financial problems were made worse by the fact that the centre portion had already been constructed.
Subsequently, Cammell Laird has had problems relating to another contract with the US company Luxus to build two cruise liners.
The ship builder is also due to make interest payments on its bond debt within the next few days, but dealers are expecting the company to default.
At the end of the month the firm was awarded a £5m contract by the Ministry of Defence, but this has done little to solve its financial difficulties.
Former minister's concerns
Former social security minister and MP for Birkenhead, Frank Field told the BBC that there were "lessons to be learned".
"Whatever the decision of the present board, I have no doubt whatsoever that the activities will go on in some form in the two yards in Merseyside and in the North East," he said.
"And despite these huge set-backs of trying to enter the big league... there's more work going on in Lairds today than there has been for many months."
He said it had been "immensely" risky for the management to try to move from ship repair to building liners.
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