Shipyard wipes off debts

Harland and Wolff has wiped away £20m in debts

Belfast shipyard Harland and Wolff has wiped off most of its debts through a share transaction.

Under a rights issue - where existing shareholders are entitled to buy more shares in a company - the yard's parent company Olsen Energy has bought shares to the value of £20m.

The effect of this is to increase Olsen's stake in the company from 70% to more than 90% and gives the Norwegian company control of voting rights in Harlands.

This year the shipyard has cleared almost £90m in debts.

It has done so through today's rights issue, the sale of its property to Olsen and the receipt of some £23m from a US customer after a lengthy court battle over a disputed final payment on an oil drill ship.

Future fears

However, the shipyard still faces an uncertain future.

At the end of August it warned there were doubts about its ability to continue in business unless it won a major order.

The shipyard is currently working on two roll-on-roll-off ferries for the Ministry of Defence.

But these will only keep the workforce at full capacity until next March and as yet there is nothing to fill the building dock after that date.

The company has been in difficulties for some time and laid off half of its 1,200 strong workforce in September 2000.

A spokesman for Harland and Wolff said the conversion of the loans into stock "gives us a stronger balance sheet and an improved financial platform for the company which will hopefully help us secure future work".

The shipyard is currently bidding for a series of contracts.