Government loans keep German yard going

Germany’s Wadan Yards will receive two loans totalling ?20.5m ($28.8m) from the government of Mecklenburg-Western Pomerania. The money will be used to set up two transitional companies for the 2,400 employees of the yards in Rostock-Warnemünde and Wismar. The European Union will support the transitional companies with an additional ?10.1m and Germany’s federal employment fund will provide ?15.5m.

The bankrupt shipyards have no money to pay their employees and the federal employment fund has been paying the workers’ wages since May. A bank consortium granted the yards a bankruptcy assets loan of ?190m to finance the construction of two ferries for Swedish Stena Line, the only order the yards have in their books after filing for bankruptcy. But the loan cannot be paid out without Stena Line’s confirmation that it will take over the vessels.

Wadan Yards has been negotiating for months with the company over this issue. “We do not expect any results until 1 August, when the insolvency money will run out,” said spokesman Lars Rosumek. The employees will then switch to the transitional companies, which will pay their wages for up to five months and provide them with opportunities to obtain further qualifications. “This will give us time to talk to Stena Line and to potential investors,” said Rosumek.

Insolvency administrator Marc Odebrecht has held talks with a small group of companies that are interested in buying the yards, but has refused to give names.

“We are feeling confident,” Rosumek said. There are a lot of positive signals.” Once an investor has been found, the employees will be able to move back from the transitional companies to Wadan Yards.