Cash crisis threatens German yard survival

Tom Todd writes: Erwin Sellering, first minister of Mecklenburg-Vorpommern, the Baltic coastal state where P&S yards is located, was reporting back to his cabinet in Schwerin on Friday (1 June) after seeking EU approval in Brussels for a financial and restructuring rescue package.

He said his government, which has given cash support totalling millions of euros to P&S in the past, was willing to help yet again. This time however he said he wanted Berlin, the banks, the shipyard and its workers to also play their part. “We cannot do this on our own”, he said.

Chancellor Angela Merkel, who has just visited Stralsund, also said it was “appropriate and important” that all concerned, including the EU, discuss the situation at P&S.

P&S Werften groups Volkswerft in Stralsund and Peene-Werft in Wolgast. As far as orders go it is reported to be one of the most successful German groups with orders in hand worth more than €1 billion. It also says it is “negotiating projects worth a further €2.4 billion”.

It acknowledges however that securing “the necessary financing is a considerable problem”, a reference to reluctance currently by the normal credit suppliers, banks, to put up pre-finance for projects.

P&S also faces penalty payments over delivery delays on the two Scandlines ferry newbuildings Berlin and Copenhagen. They should have been delivered by about now but latest word is that they will not be ready until September.

In a statement the yard rejected claims that the delivery delays had contributed significantly to its current cash difficulties. Delay penalties were not unusual and were limited, but “did not cause losses totalling millions”, P&S said.