UK shipyard Harland and Wolff has reported that it will enter receivership this week following its failure to secure new sources of financing.
The company said its request for a £200 million (US$260 million) loan from the UK government's export credit agency UK Export Finance had been rejected, leaving it in financial trouble.
US-based Riverstone Credit Partners has provided about US$25 million in additional funds to Harland and Wolff. However, the amount has not been deemed sufficient to prevent the company's bankruptcy.
In August, it was reported that Harland and Wolff reached an agreement with Riverstone to expand its credit line of 14 per cent interest payment from £90 million (US$120 million) to £110 million pounds (US$140 million).
The shipyard had been expecting to use the funds to alleviate its impending bankruptcy. However, recent reports show that Riverstone provided a loan amount that is far from the agreed amount.
Harland and Wolff had earlier decided to accelerate the liquidation of non-core businesses, including the Scilly Ferries business, marine services, and other non-revenue-generating development activities. The company's operations in the United States will meanwhile undergo a value transition, while its Australia operations have all but ceased.
Harland and Wolff is currently managed by Executive Chairman Russell Downs, a former partner ·and restructuring specialist at accounting firm PwC. Downs, assisted by Rothschild Bank specialists, is leading a strategic review of the company, which is likely to lead to its eventual sale.