Troubled shipyard loses 160 jobs

Administrators hope a buyer can still be found for a troubled Tyneside shipyard, despite more than half the workforce being made redundant.

Some 160 of the 240 workforce at McNulty Offshore in South Shields lost their jobs at the weekend after the company ran into cash flow problems.

Officials from accountancy firm KPMG have stressed the long-term future of the yard remains uncertain.

A spokeswoman said it was still hoped to sell the firm as a going concern.

The redundancies came as work on a Nigerian gas platform was completed at the weekend.

Contractual dispute

The KPMG spokeswoman said the remaining workforce had sufficient "short-term" work, but that finding a buyer for the yard was a "priority."

Union officials at the yard, which had a turnover of £35m in 2004, said they had expected redundancies.

Administrator Julian Whale added: "The administration comes as a result of a contractual dispute with a major customer.

"Due to cash constraints, McNulty Offshore was unable to continue with its contract to provide living quarters on a gas module bound for the ocean off the coast of Nigeria.

"The company consequently faced a mandatory injunction which it was unable to comply with in the short term.

"Last minute attempts to negotiate were frustrated and the directors felt they had no alternative but to appoint administrators."