Hundreds of manufacturing jobs in Scotland could be at risk, with unions expecting the new Labour government to block a £200 million loan guarantee request from troubled shipbuilder Harland & Wolff.
The Belfast-based company - best known for building the Titanic - is reportedly in crisis talks with a Wall Street lender, according to the FT.
The firm has yards in Methil and Anish on Lewis. The site in Fife was taken on by the shipbuilder following the collapse of Burntisland Fabrications (BiFab).
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The company had hoped to benefit from more offshore energy work in the North and Irish seas as a result of Labour’s new GB Energy, and had been looking to undertake more work on structures for the renewables, including jackets – the large underwater structures which wind turbines stand on.
The previous Conservative government had been in negotiations over the guarantee for more than a year.
UK Export Finance, the government credit agency, agreed to the guarantee in December, but the final sign-off is subject to a commercial rate review and consent from the Treasury.
Government sign-off would have allowed the firm to secure the £200m commercial loan from a consortium of UK banks at a lower interest rate.
They are already managing a $115m facility from Riverstone Credit Partners, an American credit investor.
The company waned the money to refinance an £90m high interest loan and invest in its operations.
However, according to the FT, a Whitehall source said giving the loan guarantee would be “deeply irresponsible” as the taxpayer would be liable for the full amount if the company failed.
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Louise Gilmour of the GMB Scotland union said: “The increasing speculation around the future of Harland & Wolff sadly means more uncertainty for skilled and committed workers who deserve far better.
“The recent history of these yards has been one of squandered opportunities and governments on both sides of border must now work with management and unions to find a new way forward.
“There are many options to protect these yards, including in the manufacture of wind turbines and other renewable energy infrastructure."
Ms Gilmour added: “We have heard far too many promises of green energy creating jobs tomorrow while the workers with the skills needed face uncertainty today.
“If talk of a just transition is ever to be more than empty words, these workers and their yards must have a secure future as part of a new industrial strategy for Scotland.”
Harland and Wolff was placed into administration in 2019 but emerged as a preferred bidder for a £1.6 billion Ministry of Defence contract.
The firm was to manufacture three vessels providing munitions, stores and provisions to the Royal Navy’s aircraft carriers, destroyers and frigates.
John Wood, chief executive of Harland & Wolff, called it “a truly defining moment” at the time.
Trading in the company’s shares were suspended this month after a delay in publishing its audited annual results.
Unaudited accounts suggested an operating loss of £24.71mn for the last financial year.
The company was founded in 1861 by Edward Harland and Gustav Wolff, his German business partner.
It employs about 1,500 people across its four sites. Reports suggest around 500 of those are in Scotland.
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Earlier in the day, Northern Ireland secretary Hilary Benn told the BBC, the government was "very seized of the issue in relation to Harland and Wolff".
"We want shipbuilding to remain in Belfast, in Northern Ireland which has such a proud tradition," he added.
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